Letter from our Chairperson
Letshego has a proudly Botswana heritage which has given rise to a dedicated and growing regional team. Based on this heritage, we have enjoyed consistent growth since our establishment in Gaborone in 1998. Our solid foundation is therefore the cornerstone of Letshego’s growth story that now improves more than 500,000 lives across 11 Sub-Saharan Markets.
Over time, Letshego’s competitive edge has been its ability to deliver simple, appropriate, and accessible solutions to those who are typically excluded from financial services or under-served, by being appropriately responsive and inclusive in an ethical manner. Letshego’s promise is a clear and consistent commitment to Improve Life as well as promote sustainable growth and diversity. Growth and Diversity remain the two core themes within Letshego’s history and will remain so for its future.
2017 has seen Letshego achieve a number of strategic milestones towards its transformation agenda to be Africa’s leading Inclusive Finance Group. We continue to invest in expanding our African footprint through our people, our technology, and the digital delivery platforms we create. Overall, I am extremely proud of our achievements which have been delivered against the backdrop of a difficult trading environment. Letshego’s on-the-ground expertise, insight, and understanding of the needs of its customers have paved the way for growth and collective benefit for all our stakeholders.
Some of our 2017 highlights include:
- The acquisition of Afb Ghana.
- The listing of our Namibian Subsidiary on the Namibian Stock Exchange.
- Winning the Mastercard Foundation’s Rural Prosperity Fund’s innovation award for our ‘BlueBox’ agency banking model in Mozambique.
- Successfully defending, diversifying, and growing our core Deduction at Source business in key markets.
- The launch of our All-in-1 financial solution, named ‘LetsGo’.
- Growing our third-party agent networks.
- Accolades from PWC Botswana for The Best Financial Services IAR in 2016, as well as receiving Nigeria’s New Age Financial Inclusion Award for our business strategy in Nigeria.
- Cementing Strategic Partnerships with recognised industry leaders.
- Our ongoing commitment to forge effective and mutually productive industry dialogues with public sector stakeholders, namely governments and regulators.
OUR ENVIRONMENT
Letshego has in 2017 faced the twin challenge of difficult macro-economic conditions and a robust competitive environment. The company was impacted by Naira weakness in Nigeria, civil service disruptions in Tanzania, as well as operational issues in Rwanda.
While these challenges were manifesting themselves, the competitive landscape saw an increase in the number of firms operating in Letshego’s traditional markets. Letshego views competition as a factor that needs consideration when crafting effective growth strategies across Africa, but we have always welcomed the benefits that increased competition brings to our customers.
Some of the markets in which we operate are unpredictable. As such, to succeed as a Company operating in several markets we recognise the importance and need to be present, adaptive, and flexible. Each country’s subtle nuances provide for differentiated success if one appreciates the dynamism inherent within the Region’s under-served communities, not forgetting the potential of the continent’s entrepreneurial spirit.
I am proud of the Letshego Team’s ability to deploy resources and support peer subsidiaries who have required interim support from regional centres of expertise. Letshego is a resilient organisation; we watch closely and learn quickly from our experiences, enabling us to take proactive, corrective actions without hesitation.
As an inclusive finance institution, we have a limited impact on the physical environment in which we operate, although we remain mindful of that impact all the same. As part of our digitisation strategy, we strive to use electronic and digital platforms wherever possible to minimise our carbon footprint through limiting the use of paper.
Letshego remains committed to measuring and analysing our social impact across all our markets and segments, which include agriculture, education, micro and small entrepreneurs, affordable housing, and the formally employed (deduction at source). At Letshego, our people are well-informed about our Environmental and Governance policies, Corporate Ethics, and Risk Management policies. These standards govern the way we conduct our business on a day-to-day basis. These are principles that not only guide the way we market and describe our solutions to our customers, but also facilitate a clear approach in collections. Also, our people understand how to support and advise customers against building unsustainable debt levels.
EMPOWERING OUR STAKEHOLDERS
Letshego continues to invest in strategic training which is directly relevant to supporting the growth and sustainability of our future ambition. The training includes financial inclusion, customer experience, legal and compliance, asset-liability management as well as Leadership development. Staff are encouraged to offer suggestions in how we may improve the way we work via all relevant training workshops, as well as identify external factors which could influence our strategic intent and the way we do business. Collaboration and collective input across all levels of the business is imperative to achieving a commitment and positive culture in any organisation.
Our Sales Agents are not only valued ambassadors in the field, but also provide useful customer data and analysis around how our solutions are being utilised, as well as updated insights around ever-evolving customer needs and behaviour.
Through our Social Impact Surveys, we have evidence that our MSE solutions are also supporting education, agri-business, and low-cost housing. Further to this, our customer feedback has spurred an enhanced focus in providing a tailored and accredited financial literacy curriculum which meets the diverse needs of our customer base.
Going forward, sector-specific insights, such as implementing irrigation methods or using off-grid power technologies, will be leveraged to provide customers with simple, appropriate, and accessible solutions, not only to access capital but also to increase individual skills and productivity efficiencies. In an age where climate change is impacting all continents, Letshego wishes to make a tangible contribution towards supporting sustainable practices for all MSEs, thereby promoting adaptability and flexibility for small business owners in challenging market conditions.
LOOKING AHEAD
Our footprint across the African continent includes growth markets with positive expansion potential in line with our financial inclusion agenda.
Letshego’s Deduction at Source business remains core to our business strategy and is the foundation on which our diversified solutions are built, and from which all our customer offerings emanate. We made good progress during 2017 in defending, diversifying, and growing this part of our business in our key markets. We expect this to continue into 2018.
With the launch of the All-in-1 solution LetsGo, we envisage a step-change in operations, business efficiencies, risk mitigation, and most importantly, the customer journey and experience. As a result, 2017 saw significant investment into the platforms which will support this agenda, unlocking the potential for harmonisation and sharing of best practice to increase our impact in every market. During the same financial period, our investments are now starting to deliver dividends in customer numbers, access points, alternative channels, and critically, in growing our revenues.
ECONOMIC & INDUSTRY POTENTIAL SUPPORTS LETSHEGO’S FUTURE STRATEGY
African economic growth is expected to improve on the continent, with recovery, albeit slow, expected in Nigeria and South Africa. Also, growth is expected in our operating geographies due to easing political uncertainty, stronger global growth, rising consumer demands, and higher public infrastructure investments. We expect this positive change in our operating landscape to result in increased demand for financial services and access to capital.
Given this economic context, we look forward to delivering improved financial performance and increasing our customer base. Through our tailored solutions, understanding of our target segments, and strategic partnerships, our ability to understand the specific needs of our target markets will enable us to differentiate ourselves from the increasing competition. Today our competition arises not only from traditional banks and financial institutions but also from fintech and mobile network operators.
The Group’s Mobilisation Team support structure stands to be a key enabler towards Letshego achieving our 2018 targets. The Mobilisation Team structure was launched in the final quarter of 2017. It comprises of both country and regional expertise, and is ideally structured to bridge the demand gap between meeting existing country targets and launching new group-wide financial solutions and systems, swiftly and efficiently. Mobilisation Teams are the catalyst that will enable Letshego to increase its impact and affect tangible progress within our Strategic Agenda.
BUILDING CAPACITY IN OUR SUBSIDIARY BOARDS
Strong governance and leadership is undoubtedly a key factor in high performance, and all Letshego’s Subsidiary Boards are compliant with local regulations. As Letshego continues to diversify its strategy and cement its focused, simple solution via ‘LetsGo’, we are already attracting Non-Executive Directors whose personal values resonate with our social commitment and financial inclusion ambition. This passion is balanced by a commitment to supporting long-term sustainable growth.
Our commitment is toward sustainable financial growth and shareholder returns. Letshego remains committed to appointing Subsidiary Boards which achieve a healthy diversity in experience, skills, and culture.
GOVERNANCE
As we launch new solutions to better serve our customers, we sometimes have to engage with regulators, as appropriate, in order to resolve delays in approvals of these new solutions. A significant cause of these delays is related to varying interpretations of regulations as well as the increasing influence of other regulators, such as those from the telecommunications sector, in relation to the provisioning of inclusive financial services. These delays pose some challenges to the roll-out of new digital solutions for our customers; however, we are confident that resolution of any issues is possible, as we engage regulators in finding mutually acceptable solutions that serve the best interests of the customer base.
There are significant challenges in achieving the harmonisation of our governance frameworks across our operating countries, while working in countries with differing legislation and outlooks. This is a challenge which we are committed to overcoming. Our response has been to create a robust governance framework that encompasses the best international practices, while accommodating the impact of local variations based on national legislation.
Strengthening our business frameworks is core to our ability to compete in the digital space and remains a key priority, with focus areas being data protection and cyber-crime. We intend to roll out initiatives to standardise service delivery points across segments and access points. In addition, we intend to strengthen our integrated anti-money laundering (AML) and transaction monitoring processes. These initiatives will complement the development of our data management system for environmental and social risks, following the updating of our Environmental and Social Management System (ESMS).
Our strategic partnerships will continue to offer opportunities to accelerate our execution capability in the acquisition of ecosystems.
OUR THANKS
On behalf of the Board of Letshego Holdings Limited, I would like to extend my sincere appreciation to the Management Team, our valued people, and customers for their commitment and support in achieving a number of transformational milestones throughout 2017. Also, I wish to extend my most sincere gratitude to our investors, regulators, communities, and commercial partners for continuously challenging our concepts, testing our resilience, and ultimately contributing to the sustainable infrastructure which will support our future growth story.
Finally, to my fellow Board Members, thank you for your support and guidance in the past year and going forward. I welcome new Members, Catherine Lesetedi and Runa Alam, to the Board and wish to thank departing Board Members, Messrs Gaffar Hassam and Idris Mohammed, for your contribution to the work of our Board.
E. N. Banda
Chairman
