LETSHEGO Financial Holdings is one of Lesotho’s fastest growing companies whose policies have attracted many people who were finding it difficult to access loans due to stringent conditions imposed by some institutions. Launched in Maseru in 2012, Letshego has since moved from lending money to civil servants only to also working with the private sector. The company’s Chief Executive Officer, Yande Sikazwe-Mothae (YM), tells the Lesotho Times (LT) how this change in policy helped make Letshego the success story it has since become.
LT: Could you tell us who Letshego Financial Holdings is and what kind of services you provide?
YM: Letshego Holdings Limited is a truly African multinational organisation, headquartered and listed in Botswana and focused on delivering inclusive finance solutions to under-served populations across 11 Sub Saharan Markets. With a staff compliment of over 3,000 and more than four hundred thousand customers. Letshego is synonymous with leveraging innovation and technology to improve the lives of individuals who have limited access to traditional financial services. Letshego is a Setswana word meaning Support. Our African footprint includes Swaziland, Rwanda, Nigeria, Namibia, Uganda, Kenya, Tanzania, Mozambique, Lesotho and Botswana.
Botswana and Namibia are our biggest operations followed by Mozambique and Tanzania. Letshego opened its doors in Lesotho 5 years ago, primarily as a government deduction at source business. This means when the company was launched, we were only working with government employees, providing simple financial solutions through lending and then deducting our money from salaries. Our operation in Lesotho is small as we only have 39 employees. Maseru is our main branch complemented by satellite branches in Butha-Buthe, Quthing, Mafeteng and Leribe.
LT: You mentioned initially targeting civil servants…
YM: That is correct. However, in an effort to seize the growth potential in Lesotho, and expand the reach and benefit of our financial solutions to more people across Lesotho, we are now diversifying our business to parastatals as well as the private sector. We have already partnered with twelve new private companies, bringing simple yet accessible financial solutions to all their employees, while delivering on our brand promise to ‘Improve Lives’.
LT: What is your vision for Letshego?
YM: In the longer term we hope to extend our financial solutions even further, leveraging off the product innovations and best practices we have achieved in some of our other markets across the continent. A key part of our success and expansion strategy as a Group is centred around effective external partnerships which compliment and add value to all our stakeholders, especially our customersh. With the positive surge of mobile technology and the ease of access devices bring to so many individuals, Letshego is partnering with mobile service providers in a number of our African markets. Letshego Lesotho is committed to forging similar partnerships in the country where we can expand and enhance our offering for the benefit of our customers, increasing access and solutions which make it easier to manage our money.
LT: What makes Letshego stand out in Lesotho’s financial sector? Why should people come to your company for services?
YM: Our ambition as a Group is to be one of the leading African inclusive finance group. Letshego is aligned with this ambition and committed to targeting what we call the ‘under-served’ members of our population – those members of our society who have historically struggled or simply been unable to access traditional financial services. Our commitment to complying with all local legal and regulatory compliance requirements, within all 11 markets where we operate, is reflective of our strict governance framework and sustainable business strategy, while extending the reach of financial services to the broader population.
Our interest rates are a little higher than your average or traditional bank, but still competitive in that our prospective clients must not forget that we price for the risk. We remain committed to delivering simple, appropriate and affordable solutions to the under-served members of our communities.
But it is quite sad that some people are viewing us and thinking that we are like ‘Machonisa’. No, we are not. We are a listed company in Botswana, and operating in Africa for almost 20 years. We have a successful track record of supporting and improving lives in the 11 markets we are working. In making our solutions simple and accessible we have committed to delivering quick service and turnaround times to our customers. This is one of our strongest selling points. For those customers who qualify for our loans, our maximum is 24 hours before a successful applicant gets the money. Most of the loans are being processed in 12 hours. Our customers remain our priority. We therefore continuously strive to deliver fast and efficient support and service.
LT: How do you rate the Lesotho office’s financial performance compared to the company’s operations in the various other countries?
YM: Lesotho is performing extremely well, and we are making a positive contribution to the Group as whole. We are committed to investing in our business, delivering value to our Lesotho customers and forging strategic partnerships which provide value-adding benefits in the long term.
We are driving the Lesotho office to greater heights and will continue to leverage best practice and innovative solutions from other markets to increase our impact and value to our customers in Lesotho.
LT: Going back to your motto, ‘Let’s Improve Lives’…Do you believe you have lived up to this slogan?
YM: Firstly, we look to people borrowing money from us to improve their lives. This means using that money to start a small business or expand an existing one, build a house, pay school fees or buy a car. We do not believe it’s wise for people to borrow to throw a party, for example. Earlier this year, we ran a Lives Improving Campaign and the whole essence of that was to see how our clients were using the money they got from Letshego. Many clients participated in our competition, which required them to share their stories on how the money improved their lives. We received many inspirational stories of people who started livestock enterprises and were now selling wool and mohair; a woman added the money we gave her to what she had and managed to send her child to an aviation school to become a pilot and others bought land and constructed homes.
Our winner received a mobile kitchen and that will help increase their income and ability to pay back their loan. For Letshego, we are excited when we experience that euphoria because we have improved somebody’s life. Our goal is to see people using the money they get from us to grow beyond the basic need, not to use the money for groceries. We want people to build, develop something, improve themselves. We used to focus on personal loans, but now we are also looking at sponsoring vehicle purchases for people to enhance their income. We have also partnered with one mobile company to enable our clients to buy phones or laptops through our financing. We are creating solutions and using digital innovation to bring financial benefits to the broader community – we look forward to improving more lives across Lesotho.
LT: What are your clients’ capacity to pay back the money, generally? And also, what measures do you take to ensure you always recover your money?
YM: Because this a deduction-at-source business, we do not experience many challenges with people paying back the money. There is a challenge in some circumstances when the employee resigns, but we continue to improve our systems and criteria to only lend to those members of the community who can afford and have the means to repay their loans, guiding them on responsible financial principles and money management, and encouraging customers to leverage the funding opportunity to increase future income and growth potential.
LT: What challenges and opportunities do you see in the financial sector?
YM: One of the threats that can impact our business is the fact that if you look at the landscape in terms of financial institutions and the population size, we are competing with a number of companies, including banks. Letshego remains committed to increasing access to financial solutions to those members of the community who do not have access to traditional financial services.
Financial institutions mean different things to people and that is based on the nature of services provided. There are many exciting opportunities in Lesotho and one area we are looking at is micro and small businesses. It’s one segment we need to really pay attention to because there is a lot of scope and run-way in that sector. These are people who are starting-up and they need to be helped because sometimes they don’t have capital to start or grow their businesses.