Core Markets Fuel Letshego’s Comeback as Customer Deposits Soar

Botswana, Namibia & Mozambique collectively add 80% to profit growth Letshego enjoys strong growth across key business fundamentals Customer Deposits jump 40% to P2.1 billion in 2024 Letshego Holdings' financial results for the 2024 financial year were driven by solid performance in its core markets of Botswana, Namibia, and Mozambique. The Group faced challenging macroeconomic conditions across its markets, including inflation, low liquidity, and, in some cases, hyperinflation. Letshego, a Pan African microlender listed on the Botswana Stock Exchange (BSE), is present in 11 African markets from Southern Africa, East and West Africa. In its 2024 annual report released last week, Letshego Holdings reported a 40 percent increase in customer deposits, reaching P2.1 billion, up from P1.5 billion in 2023. The Group also posted a 32 percent rise in net interest income, which climbed to P2.34 billion from P1.77 billion recorded during the 2023 full-year period. The Group’s Profit before taxation improved by 110 percent year on year for the financial year ending 2024. While still in a loss after taxation position, Letshego said the loss reduced by 37 percent from P149 million in 2023 to P93 million in 2024. “The Group’s operating income grew 26 percent year on year to P2.88 billion on the back of strong top-line growth. Interest income for the year of P3.9 billion reflected double-digit growth.” Letshego said the net credit impairment charges for 2024 amounted to P783 million, an increase from P457 million in the prior year. This rise was primarily driven by higher-than-expected delinquencies, including non-DAS lending in Botswana and Lesotho, as well as short-term lending in Kenya. “Additionally, increased legacy write-offs and heightened operational risks contributed to the increase in credit impairments,” the Group explained. In a commentary accompanying the Group performance, Letshego Interim Chief Executive Brighton Banda said topline year-on-year income growth reaffirms that the business fundamentals remain strong. Banda said profit growth continues to be driven by three core markets, Botswana, Namibia and Mozambique, collectively contributing over 80 percent of the Group‘s total profits. “In East and West markets, we saw green shoots, with Ghana and Tanzania both showing good growth in short-term loans year on year of 125 percent and 568 percent, respectively.” “After tax losses for the year are largely attributable to a 12 percent increase in taxation for the year, driven by increased tax obligations from improved performance in our top three markets and prior year adjustments.” From a risk perspective, Banda said they are prioritising attaining global standards in effective risk management. He said the Group’s Enterprise Risk Management Framework continues to adapt around evolving business activities and trends in third-party risk and ever-changing market environments. “Recent updates include our Sustainability and ESG Framework. Our loan loss ratio increased in 2024 to 5.4 percent from 3.3 percent the prior year.” The Group was still exposed to low-performing portfolios originating in the previous years, where the Group took incremental provisions and write-offs. “In this reporting period, we tightened our credit provisioning as well as write off policies early in the year. The Group took strategic decisions to derisk some challenging business segments during the year.” Additionally, Banda said credit risk frameworks have also been adjusted for new product launches in our markets, giving us confidence that we will achieve our portfolio risk appetite in 2025.

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𝐃𝐞𝐛𝐬𝐰𝐚𝐧𝐚 𝐑𝐞𝐜𝐨𝐠𝐧𝐢𝐬𝐞𝐝 𝐨𝐧 𝐈𝐧𝐭𝐞𝐫𝐧𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐬𝐭𝐚𝐠𝐞 𝐰𝐢𝐭𝐡 𝐀𝐔𝐒𝐂 𝐦𝐞𝐝𝐚𝐥 𝐨𝐟 𝐇𝐨𝐧𝐨𝐮𝐫

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𝐃𝐞𝐛𝐬𝐰𝐚𝐧𝐚 𝐑𝐞𝐜𝐨𝐠𝐧𝐢𝐬𝐞𝐝 𝐨𝐧 𝐈𝐧𝐭𝐞𝐫𝐧𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐬𝐭𝐚𝐠𝐞 𝐰𝐢𝐭𝐡 𝐀𝐔𝐒𝐂 𝐦𝐞𝐝𝐚𝐥 𝐨𝐟 𝐇𝐨𝐧𝐨𝐮𝐫

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Core Markets Fuel Letshego’s Comeback as Customer Deposits Soar

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