- Profit after tax jumps 16% to reach P730m
- Digital Enterprise customers grow to over 300 000
- Letshego Group CEO Okai upbeat on transformation
Chief Executive Officer of the home grown micro lender Letshego Holdings Limited, Andrew Okai, has said the strong Group performance in 2021 has been due to the digital transformation strategy.
The outspoken Letshego CEO told the media in a virtual roundtable presentation of financial results on Thursday that they weathered the Covid-19 storm to post strong results.
He said Profit After Tax (PAT) went up by 16% to P730 million year-on-year with Profit Before (PBT) Tax up 11% to P1.15 billion.
Letshego’s total assets also increased by 30% in 2021 to close the year at a whooping P15.8 billion. The Group said its Non-Funded income increased by 30% year-on-year to P368 million and grew to constitute the 16% of Operating Income (FY2020: P284 million, 13% of Operating Income).
“Our Enterprise customers which comprises of the digital mall grew from 100 000 as at the end of last year to 305 000 at end of February and currently we are 325 000 forming the digital mall. We have launched digital mall in our 10 markets of operation and we are very happy over how the digital mall is exponentially growing. 2021 has been good year for Letshego Group,” he said.
Okai said the Botswana market at the moment boast of 90 000 registered enterprise customers. In addition, Okai said 2022 is also going to be exciting year for Letshego as it marks the start of digital transformation strategy. The strategy, he said, will unlock growth for Group revenues.
He said Letshego declared 2022 the year of customer as the business will ensure that customers get the best services anchored on the five conversation of digital transformation journey.
According to Okai, the business has proven to be resilient given the test of the Covid19 pandemic. He buttressed that the culture and enterprise agility has been integral part of transformation.
“We are targeting to have reached 1 million customers in 2022 on the digital mall. We will achieve the target looking at how the enterprise customers continue to grow exponentially. This is showing that the transformation strategy is working. We are also going to invest on sharpening the skills of our people around data. This is key for the revenue that we anticipate,” he added.
He said the Group is shifting to a digital financial service provider, moving away from the traditional micro lender. Letshego Group Chief Financial Officer (CFO) Gwen Muteiwa said the business has done quite well given the volatile circumstances in the markets, owing to the disruptive Covid19 pandemic.
She said the Group recorded strong performance on deposit segment, crossing the P1 billion mark in portfolio value, and thus increasing by 77% year-on-year to P1.2 billion (FY2020: P664 million).
Operational efficiencies over the period saw the segment reduce its costs by 100 basis points, with the final quarter-on-quarter growth measuring the highest trajectory ever at 14% growth.
“Deposit mobilisation remains a priority for the Group, evidenced by increased deposit customer numbers growth of 17% to 722 921 (FY 2020: 619 481). Focused initiatives to grow the deposit base in 2022 include digitalising micro-saving solutions, salary domiciliation, development of our LetsGoPay payment ecosystems on the digital mall and growth in strategic partnerships,” added Muteiwa.
The Group’s continues to diversify funding sources.
“By increasing its overall quantum of funding, the Group has made strong progress in balancing funding sources. Wholesale bank funding reduced by two percentage points down to 39% of Letshego’s total funding portfolio, whereas the Development Finance Institution (DFIs) funding increased to the 25% of the Group’s total funding portfolio (FY2020: 21%,” the Group indicated.
Meanwhile, Okai said the company will be taking cautions risks going forward.
He said some of the risks that are being assessed include the Covid19, the geo political tensions especially between Ukraine and Russia and the elections in Kenya this year and Nigeria in 2022.
Okai said the two markets of Kenya and Nigeria are all equally very important to Letshego.
“Countries are recovering and we are seeing inflation rising up. There are geo political tensions all over and Government overthrowing but we are happy that for now in our 11 markets we have witnessed stability and this is very important for the business. Covid19 remains a big risk on the horizon that we continue to watch how the pandemic goes about on economies,” he added.