Defeat Covid-19 odds, posts PBT P1 billion
Assets grows by 12% in 2020 reaching P12.2 billionGroup CEO Okai applauds strategic plan for resilience
Home grown Pan African micro lender, Letshego Holdings Limited has posted record impressive results for the year ended 31st December 2020 with its customer deposits revenue growing by 56% despite the Covid-19 pandemic.
The group, which operates in 11 markets in Africa, delivered profit before tax in excess of P1 billion during the year
This significant achievement bridged the net year-on-year decrease from 20% in H1, to a single digit of 9% in H2, with the company’s total assets growing by 12% to P12 billion (P10.9 billionn 2019).
“Performance was underpinned by 12% growth in net customer advances and asset quality improved with an overall reduced Loan Loss Ratio (LLR) of 0.3% (FY 2019: 1.7%). Business resilience was further demonstrated by a reduction in Non-Performing Loans to 5.3% (FY 2019*: 6.9%),” said Letshego.
The Group CEO Andrew Okai said the results show resilience of the business in the difficult trading environment clouded by economic uncertainty and strain as a result of Covid-19 squall. He noted that the return to growth dubbed 6-2-5 plan was critical in enhancing business growth.
Briefing journalists in a virtual roundtable discussion, buoyant Okai said digitalisation forms the core part of diversifying the group’s funding base, adding that it was well achieved during plan 6.
He said plan 6 of strategic transformation, which was undertaken in the first six months of the year, included digital adoption as well as new appointments to fill vacant positions.
Oozing with confidence, Okai said the underlined growth in the overall business performance was underpinned by effective implementation of the plans, saying a lot will be achieved.
“The Covid-19 pandemic affected key aspects of our business however we made the deliberate decisions to preserve and ensure that our customers continue to be served. The business model has shown a lot of resilience as there was no retrenchment of our staff too,” said jubilant Okai.
Letshego CEO, who marked first year in office this month, buttressed the importance of business diversifying its revenue streams to reduce overdependence on the Deduction at Source (DAS).
According to him, post the pandemic not all sectors of the economy will recover well, noting that it is anticipated that most of economies are likely to follow a K shape recovery from the W.
“This scenario is whereby the sectors of economy will not be recovering at the same time in various countries due to uncertainty posed by the pandemic on the economies. As the business we are cautious of the difficulties that lie ahead in our markets hence we need to be diverse,” he stressed.
He pointed out that at the moment the economies in their markets are decelerating due to the pandemic burden but is upbeat that with vaccine rollout there is a hope for recovery in 2021.
Letshego Group Chief Financial Officer (CFO) Gwen Muteiwa said the business has done quite well given the volatile circumstances in the markets owing to Covid-19.
She noted that the DAS continues to be a key segment of the business as 39% increase of new customers were realised during the year, insisting that the business will guard against losing clients.
“There has been a challenge in some of the currencies in the markets that we operate in. The currency in Mozambique and Uganda weakened while Pula remained resilient,” Muteiwa declared. The Profit after Tax (PAT) of P631 million was 13 % down year-on-year (FY 2019: P726 million).