Country Chief Executive for Letshego Botswana with additional executive oversight for Lesotho and Eswatini, Fergus Ferguson, has been appointed Regional Executive, East and Western Markets, effective immediately. Letshego’s East and West Market portfolio comprises six Letshego markets, namely Kenya, Tanzania, Uganda, Rwanda, Nigeria and Ghana.
With recent challenges in macro-economic conditions, central bank rate increases, rising inflation and staggered recoveries from the pandemic, Letshego’s Group Executive Committee has stepped up its direct and customised support for East and West African markets, re-categorising the portfolio as ‘Turn Around Markets’ within its Geographic Rebalancing strategic pillar.
Ferguson will shift responsibilities from his current Southern Africa portfolio and assume direct oversight and executive accountability for the traction and execution of the Group’s structured resurgence of Letshego’s operations, seizing the tangible growth potential available in these growing regional economies. He joined Letshego in August 2015, initially to set up the Group’s Credit Risk team. When he joined Letshego, he looked after all collateral of countries or 12 markets, specifically specialising in credit risk management.
“An opportunity arose in late 2017 to join the Botswana subsidiary as Chief Executive, with the big attraction obviously being that I would be moving from a multi-geography role to being more purposeful around the impact that I had wanted to do in Botswana for the Botswana customer,” he says in an interview with The Business Weekly & Review. “So I think my transition then from being a specialist to being a generalist started then with my Botswana CEO role.”
That also evolved over time from being CEO of Botswana to being a regional CEO for Botswana, Eswatini and Lesotho. Ferguson says that change happened in his career in 2020 where, over and above Botswana, he started looking after Eswatini and Lesotho as well as providing strategic oversight to countries in executing key strategic initiatives agreed between the country and the Group.
“Some of our biggest successes have come over the last couple of years,” he says. “For example, in Eswatini we launched a very successful partnership with a mobile operator there called MTN where we launched something that was recently launched in Botswana called MoMo loans or loans offered on the MO Money platform. “We launched that in Eswatini few years ago where it is now one of the main revenue drivers for the Eswatini business.”
To be specific to Botswana now, when Ferguson joined the Botswana business Letshego was really a single product business where the company was doing deductions at source for government employees and nothing else. One of the most important tasks for Ferguson was therefore diversifying that product with propositions to reach more Batswana. As a result, Letshego Botswana launched a number of new products, including lending to non-government employees, and recently launched its affordable housing proposition towards the back end of last year.
This, for Ferguson, is critical in Botswana because around 75 percent of Letshego Botswana customers take loans for home improvement from Letshego and invest in property where there would otherwise have been no access to funding. Prior to that, says Ferguson, Letshego Botswana launched the Micro and Small Enterprises proposition for people who would not ordinarily get financial support from mainstream banks to be able to develop their businesses.
“We believe that supporting youth and women owned businesses, particularly given the high unemployment rate in the country, was our way of giving back to the community,” he says. “We are happy with the success that our Micro and Small Enterprises proposition has had in Botswana because this fits in well with the government’s agenda of driving citizen economic empowerment and growing entrepreneurship within the country.”
Ferguson notes that Letshego, continues to work with other stakeholders in the public and private sectors to see what else Letshego can do to support MSEs in the country to be able to really get the access to financial services that they would otherwise not access. “We have also heavily expanded our insurance business where Letshego, like any other insurance company, is able to insure your home and car and you are able to get funeral and life insurance policies,” he discloses. “Just last year, that business alone brought in considerable revenue and new revenue that Letshego Botswana had previulsy not been able to receive.”
Ferguson says he leaves Letshego Botswana, Eswatini and Lesotho as a cluster, having been able to achieve record profits in 2022. He declares himself contented that he leaves the region in the best shape that it could ever have been in even in terms of returns on equity to its shareholder, Letshego Holdings Limited. He adds that he also leaves the region at a point where the region is strategically prime for incremental success. Ferguson is part of the Group that started its geographical rebalancing in 2020, which is not the first time that Letshego attempted to drive contribution of its East and West African businesses within the Group.
This is with the realisation that there was a need for the Group executive committee to provide an enhanced oversight, both strategically and from an execution perspective. In agreement with the Group executive committee and board and the Botswana board of directors, Ferguson says he will take on the mettle of driving towards Letshego achieving its strategic objective of achieving geographical rebalancing with renewed energy and vigour. “It means I would effectively be taking over as regional executive for our new markets,” he says. as “Our eastern and western markets are new acquisitions that the Group has made and are where we are not yet pumping the way some of our established businesses in southern Africa are performing.”
But Ferguson’s new role excites him. He believes that with the right level of strategic oversight and Letshego being closer to the markets, they should be able to deliver on the Group’s strategic objective of achieving geographical rebalancing. “This does bring with it a lot challenges as we are looking at totally transforming our East and West African businesses to become more efficient and to address better their specific country needs and customer needs,” he points out. “We will be accelerating our digital transformation as well as our play within payments and non-funded income in those countries.
“We will also be accelerating and strengthening both from a leader perspective and capability setting within those markets, as well as entrenching the Letshego brand in those markets.” The new markets include Ghana, Nigeria, Kenya, Rwanda and Tanzania. Letshego recently announced consolidation of its Tanzania businesses. The Group has a bank and a microfinance entity in Tanzania and the two are coming together to form what Ferguson believes will be a more formidable bank in Tanzania.
In Nigeria Letshego has a microfinance bank and is trying to drive payments capability, push non-funded income, as well as accelerate the potential in those markets. Ferguson says when they look at Nigeria, they have a national licence in the huge West African country, which means the company can reach out to any customer across Nigeria. “How do we support our Nigerian business to penetrate that market and bring the value of what we believe our licensing regime offers us?” he asks rhetorically.
In Ghana, Letshego has a savings and loans licence that gives the company immense opportunity to challenge established financial services companies and to some certain extent collaborate with them. Ghana’s is what is called a tiered licence through which they do not need to apply for a banking licence. Their approach in East and West Africa is leveraging on their digital platforms, accelerate payments capabilities, accelerate non-funded income to reduce costs of funding and bring the aggregated value to the shareholder here in Botswana.
Letshego faces a challenge in cost of funding. Generally, it raises money by borrowing in the debt market like issuance of bonds and funding from commercial banks to fund their business. The cost of funding is high, looking at interest rates other economic shocks. According to Ferguson, raising retail deposits allows Letshego to fund their operations cheaply. But because of shocks seen in markets, sometimes performance gets dampened. Nevertheless, Ferguson is proud that because of the resilience built in some of the Group’s businesses like Botswana, Mozambique, Namibia, Eswatini and Lesotho, performance remains strong as they can withstand shocks from macroeconomic activities.