Letshego remains a profitable business despite the challenges they faced in the 2016 financial year, group Chief Financial Officer, Colm Patterson said when presenting the results for the financial year ended 31 December 2016. According to Patterson, Letshego has done well in the past year with business driven mostly by government employees through deduction at source which remains its core business. Diversification of offering, which was started in recent years, is beginning to pay off as now non-government employees’ credit extension account for 10 percent of the portfolio followed by housing which now makes 9 percent of Letshego’s portfolio. Further segment diversification which will include agriculture, education and housing are reportedly underway in a bid to expand Letshego’s offering. During the period under review, Letshego’s revenue exceeded P2.2 billion, a 9 percent increase on the previous year. Letshego registered profit before tax of P948 million, a 9 percent decrease from P1.0 billion that was recorded last year during the same period. Impairments increased by 30 percent to P180.6 million with BCL contributing to P22 million while the 60 percent depreciation of the Mozambique Metical (Mozambique currency) is said to have resulted in a reduction of the group profit before tax of P33 million.
The group says it is tightening its impairment methodology, which accounted for P33m of the increase in the impairment charge during 2016. Letshego, which aspires to be a Pan-African company and now with footprints across 11 countries so far, saw its advances grow by 6 percent to P7 billion but total borrowing by customers were flat at 300,000. Financial results of AFB Ghana, which is the latest acquisition by Letshego in its desire to be a Pan-African company, are not included in the current group financial results. The Ghana business is said to be huge with the purchase expected to be about P96 million and service over 60,000 customers across 25 customer access points. Letshego which was formed in Botswana 19 years ago has expanded across the continent mostly through inorganic expansion over acquisitions. Chris Low, Letshego Managing Director, said they will continue to look for further opportunities across the continent in a bid to advance the brand. He said they are assessing opportunities on a continuous basis and therefore would carry on expanding through either organic or inorganic means.