Letter from the Chairman
Letshego has achieved a number of key milestones in its transformation agenda towards creating Africa’s leading inclusive finance group. We continue to invest in expanding our African footprint as well as our technology and delivery platforms.
During the 2016 year, a number of significant landmarks on our inclusive finance journey were reached, and included:
- Refreshing and unifying the Letshego brand across our 10 markets while retaining our strong brand equity;
- Securing our banking licence in Namibia, now enabling us to accelerate our inclusive finance model there;
- Progress in integration of our 2015 deposit-taking acquisitions in Nigeria and Tanzania;
- Obtaining principal issuer status from MasterCard in Mozambique;
- Building-out of our third party and proprietary agent network;
- Continued investment into our IT environment and bringing 9 countries onto our core platform;
- Solidifying our partnership with the Alliance for Financial Inclusion, as we continue to represent the African market; and
- Progress in “fintech” partnerships.
Letshego’s Heritage and Promise
With a proudly Botswana heritage and a dedicated, as well as growing, team, we have enjoyed consistent growth since our establishment in Gaborone in 1998. This growth has been built upon a proven model borne out of Botswana, tailored and exported across the franchise into Southern, East, and West Africa. Over time, Letshego’s competitive edge, and DNA, has been in its ability to deliver simple, appropriate, and accessible solutions to those who are typically excluded or under-served financially in a responsive, inclusive, and ethical manner.
As we have expanded our footprint across the continent, our promise has been clarified for all our stakeholders to be one of improving life as well as of growth and diversity, the latter two being familiar themes in Letshego’s history.
The Whole is Greater Than the Sum of the Parts
This captures Letshego’s approach to achieving a clear strategic vision for pan-African growth and broad-based diversification while balanced with a focus on social impact through inclusive finance. As the Board, leadership, and broader team of Letshego, we are committed to improving the lives of our customers in collaboration with key strategic partners – we recognise that partners with common visions, requisite (and complementary) skill-sets have the ability to accelerate our journey for the benefit of all parties, with the customer at the centre of this.
As such, we seek like-minded partners to contribute to elements of our end-to-end value proposition where we believe speed, skill, and capacity are critical. This approach has yielded positive results for the Group as reported historically, as well as in 2016.
- Embracing financial inclusion: In this space, we take our privilege as Alliance for Financial Inclusion’s (AFI’s) sole African partner seriously. Through this platform, in conjunction with 4 other global private sector partners and over 100 country regulators (and / or policymakers), we have contributed to a number of financial inclusion agendas relevant to Africa: digital financial services, regulation, funding, and gender bias. In addition, we have partnered with local service providers to create team capacity as well as to impart financial skills to our customers and communities.
- Growing the franchise: From rolling out a refreshed brand identity, to integrating newly acquired businesses into the franchise, strategic and key partnerships have played a significant role in enabling the leadership team to record this progress.
We were pleased to obtain a banking licence in Namibia, as this will enable us to pursue our inclusive finance agenda on a broader basis in that country. Also, we made progress in the integration of our 2015 acquisitions of licensed deposit-taking businesses (Letshego MFB in Nigeria and Letshego Bank Tanzania) into our Group.
- Enhancing customer experience: Customer-centricity is key to Letshego’s model. To enable this, partnerships with vendors, ecosystem players, and “fintech” companies, amongst others, have been, and are expected to be, important enablers to enhancing customer experience. Our unique customer experience proposition is being built to anticipate needs – this includes acquiring (or sharing) data analytics and data science capability, enhanced social analysis methods, and improved sales and service capability.
- Embedding the future capability model: In 2016, our multi-year partnership with Tata Consultancy Services saw another 3 operations being aligned onto the integrated customer operating and enterprise system, TCS B@NCS (with Oracle EBS providing financial and other reporting functionality) – this brings the number of countries on a single platform to 9 out of 10 (Letshego MFB in Nigeria and Letshego Bank in Tanzania are planned to be integrated in 2017 and 2018 respectively). In addition, we have maintained our commitment to skills development through the roll-out of face-to-face leadership development courses as well as e-learning modules, and conducting internally led training across key countries around our enterprise risk management framework and credit risk philosophies.
Clearly, the success of our growth and diversification drive is determined largely by our ability to not just keep up with, but, in some respects, optimise current trends. In the retail financial services industry across Africa, the dominant trend is one of digitisation, mobile-enablement, and leap-frogging conventional banking processes into more intuitive technological ecosystems. Investment into systems integration, stability, and technological innovations will therefore continue to be intrinsic to Letshego’s strategic agenda.
Our Commitment to Our People
We are developing a team of future leaders, with unique execution skills. From under 30 people in Gaborone at the close of 1998, Letshego has now grown to 1,620 full-time employees, complemented by over 1,160 commission-based direct sales agents. This combined team of 2,780 represents an 18% increase in headcount on 2015. Skills we have invested into across the business include financial inclusion business development, customer experience, sustainability and ESG, financial technology, legal and compliance, and asset-liability management.
The Group has continued to invest in this growing team, from 570 person-days of leadership development interventions delivered throughout 2016 to every single member of the Letshego team being taken through an intensive and interactive immersion into the Letshego strategy and its relevance for each individual as well as functions, countries, and the Group. Additionally, over 50 of our senior and middle managers were taken through Letshego-customised leadership development centres, designed to bring the best out of our next generation of Letshego leaders. Further, technically-focused e-learning and competency-based training was rolled out across the Group to all our people, covering subjects such as asset and liability management, treasury and liquidity management, and business continuity management.
Our customer-facing sales teams are the face of the Letshego brand. During the year, we rolled out a number of targeted sales effectiveness workshops, refreshing their understanding of Letshego’s ethos and how this needed to be translated in a balanced manner into our customer conversations.
In totality, the Group invested over BWP 10 million towards learning and development – signalling the recognition that the Board and Senior Executives have for our people’s influence on our strategic success.
Risk Management and Social Licence
Through the year, the leadership team and Board have worked together to strengthen the Group’s governance structures – as at the end of 2016, 18 Independent Non-Executive Director appointments were effected across the Letshego footprint based on careful screening for skills, credentials, and diversity. We have either concluded, or are concluding, the appointment of independent Non-Executive Directors as subsidiary Board Chairpersons.
Also, the Board has supported the executive team’s efforts in strengthening the Group’s risk management and operating platforms in alignment with international standards. This has included a continuation of the work initiated in 2015 to map out our sustainability, ESG, and social impact frameworks and credentials, as well as to embed these philosophies and frameworks into business-as-usual.
Pleasingly, an independently conducted Social and Environmental Due Diligence indicated high levels of conformance with globally accepted frameworks including:
- the UN Global Compact – at 97%
- the IFC Performance Standards (2012) – over 75% compliance to relevant standards
- the IFC Interpretation Note on Financial Intermediaries – initially reported as 50%, and remedied by year-end to 70% due to actions taken by leadership
- the UN Environmental Programme Statement of Commitment by Financial Institutions to Sustainable Development – at 85%
Our approach to running our business is all-inclusive and comprehensive. We consider not only the commercial imperative of growing our profits sustainably, but our broader impact, being a constantly growing provider of financial services through Africa.
As such, we seek to objectively establish Letshego’s distinct relationship capital and social licence to operate as measured both by our ability to manage the downside as well as optimise the market opportunity created through embracing a holistic social governance code.
Looking Ahead
Letshego continues to drive its financial inclusion strategy and strengthen its operations through investment in technology and people as well as through strategic partnerships. Geography, customer, and solution diversification remain core to Letshego’s strategy. The Board of Directors is confident that the Group is well positioned to benefit from the growing markets in which it is active and views inorganic expansion via acquisitions as important to the acceleration of Letshego’s strategy. As such, we will continue to seek and review options for the Group to pursue, provided they augment, and do not detract from, our core business focus.
Appreciation
As I take over the Chairmanship of the Letshego Holdings Limited Board from my predecessor John Alexander Burbidge, I remain immensely grateful for John’s ceaseless professionalism and dedication to his responsibility, not just to me, but to all of Letshego’s stakeholders. Under his guidance, the Group has grown from a handful of countries and a single-product focus to now existing in three main African regions with a clearly articulated diversification and growth agenda that embraces both a commercial and social purpose. My fellow Board members and I extend our sincere thanks to John for his wise counsel and exemplification of governance over the years.
Also, I must extend the Board’s deep appreciation to Dumisani Ndebele, who has served Letshego since 1999 in various capacities. These included Finance Director, Risk and Compliance Director, Company Secretary, and Group Head of Governance and Compliance. Dumi’s deep institutional knowledge, coupled with his sound technical skills and passion for our business will be missed; nevertheless, we wish Dumi well in his active retirement!
As I settle into my role as Chairman of this dynamic and exciting Group, I see the Letshego team as being fundamental to its continued growth, diversity, and ability to improve life. For your efforts, up to and including this point, the Board and I thank you; and for the future passion and dedication we have come to expect from Letshego teams, we pledge to support and recognise your development and contribution.
Finally, we extend our appreciation to our loyal customers, whose feedback about, and usage of, Letshego’s solutions and methods have kept us challenged – and we embrace this as our route to delivering on our mandate. This equally applies to our Governments, regulators, and communities, whose respective interests we continually engage around in an effort to truly improve life.
Enos Banda
Chairman
Letshego Holdings Limited
1 March 2017
