• Pursues financial inclusion
• Started deposit taking in Mozambique and Rwanda
• Await full banking licence in Namibia
Pan African micro-lender Letshego Holdings Limited has escalated financial inclusion to the top of its agenda by catering for the low and middle class by going beyond just lending. Letshego group Managing Director Chris Low said on Wednesday that without necessarily copying what the commercial banks are already doing, they would as much want to make financial access to the groups who find themselves excluded from the running of the economy.
Low said that their board resolved to embrace financial inclusion as a new strategy last year. The group, which has footprints in 10 African countries, has committed to provide affordable financial services to the low and middle segments of the society as it believes financial inclusion is the main driver of the economy. The group has already commenced the process of deposit taking in Mozambique and Rwanda and is waiting for the full confirmation of its full banking license in Namibia. Deposit taking, according to Low, is the first enabler for Letshego towards offering a full financial inclusion site.
Low said Letshego’s financial inclusion solutions will provide customers with mobile and internet banking, agency banking, mobile money transfer services, customer to business bill payment services and the objective is to become a leader of affordable, appropriate and high quality inclusive financial services in the continent. To achieve the objectives of the financial inclusion strategy, Low said though their model of business is based on deduction at source, they will target the unbanked group of the society. This is because the survey undertaken by the group has indicated that 25 percent of Letshego customers in Botswana use credit facility to finance small business and the aim is to increase the uptake.
Besides that, the group initially targeted the formally employed individuals through agreements with their respective employers, Letshego will now be able to provide credit facilities to individuals even though Letshego might not have secured a deduction code with the respective employer. For his part, Letshego Financial Services Botswana CEO Frederick Mmelesi said part of their strategy involves financial literacy which was launched last November. Mmelesi said financial literacy is something not familiar in Botswana as even those believed to be knowledgeable find themselves in financial troubles. He said this is even made worse by the fact that the education system itself from the early stages does not recognise or address issues of financial management.
To address the issue of financial management, Mmelesi said they have engaged their consultants to share light on that regard. The financial literacy campaign is being held in conjunction with the Ministry of Finance and Development Planning (MFDP), Directorate of Public Service Management (DPSM) and the regulator, Non-Bank Financial Institutions Regulatory Authority (NBFIRA). The campaign, which will run for three years, covers all civil servants, parastatals, private sector and the informal sector. Mmelesi noted that as a micro lender they should lead by example in matters of financial management. Mmelesi said they are piloting a housing loan project in Orapa and more than 600 houses have been built, with some having been built from scratch, others being completed from the loans while others were outright purchases.
Letshego is broadening its client base. Mmelesi said they are spreading their wings to the mining industry and have since secured a deduction code with Orapa, Letlhakane and Damtshaa Mines (OLDM) to start providing credit facilities to the employees of the diamond company. Mmelesi further said they are also engaged in discussions with BCL Mine management to secure a deduction code with them.