Business

Letshego returns to profitability

Lewanika Timothy | Tuesday September 3, 2024 16:50

Letshego Holdings has returned to profitability following successive years of a negative bottom-line as the pan-African micro-lender’s books faced challenges due to its investment in East and Western African markets.
 
Letshego Holdings has returned to profitability following successive years of a negative bottom-line as the pan-African micro-lender’s books faced challenges due to its investment in East and Western African markets.

The Botswana Stock Exchange-listed company posted after tax profits of P17.8 million for the half year ended June 2024.It had posted a year end loss of P149 million last year, with financials harmed by investments in markets such as Nigeria and Tanzania as inflationary pressures and subdued macro-economic climate hampered growth. Officials at the home-grown micro-lender revealed during the half year results announcement in Gaborone last week that despite the challenging environment, they managed to steer the books to profitability.

“The Letshego business returned to profitability in the period under review versus the loss posted at the end of December 2023,” executives revealed. “On a historical cost basis, excluding hyperinflationary accounting, profit after tax grew by four percent year-on-year to P74.2 million. With hyperinflation, profit after tax closed at P17.8 million in June 2024. This was a return to profitability from the year-end loss of P149 million,” they added. The group’s income growth was supported by mobile lending, a new product that has steered around the tough East and West Africa markets, which have been tough for Letshego, up 73% in book size to P909 million in line with the group’s product diversification strategy. According to the company, Ghana continues to lead in mobile lending, with strong growth recorded in Tanzania and Botswana. The group’s mainstay Deduction at Source offering recorded steady loan growth of six percent year-on-year to P11.9 billion.

Group Chief Executive, Aupa Monyatsi, said the micro lender will intensify efforts to protect its core business of deduct at source loans while also exploring new pockets of opportunity in the mobile loan market. “Our core product which is deduct from source has gotten the attention of banks. We will fight to protect our core products while also focusing on new opportunities that exist within the market,” he said. Letshego opted not to post dividends to shareholders as the macro-economic landscape remains uncertain and profitability may be hampered by an uncertain business environment.