• Sub-Saharan Africa's economies show signs of recovery but at a slower pace.
  • Letshego focuses on cost efficiency, strategic initiatives, and strong balance sheet for sustainable growth.

Harare- Sub-Saharan Africa's economies have shown signs of recovery in the first half of 2023, although the pace has been slower compared to the previous year. Letshego Holdings Limited, a leading financial institution operating in the region, has released its reviewed consolidated financial results for the half-year ended 30 June 2023. The company's performance remained resilient despite the challenging macroeconomic conditions across Sub-Saharan Africa, reflecting the persistent global challenges experienced since 2022.

The economic growth in Letshego's markets is expected to taper down to 3.5% in 2023 before rebounding to 4.1% in 2024, indicating a cautious recovery trajectory. Inflation rates have generally eased in most markets, except in Nigeria, where a removal of fuel subsidy and exchange rate liberalization led to a further inflationary flare-up.

Monetary policy tightening continued in the first half of the year, with some countries witnessing an increase in monetary policy rates, while others maintained rates at the same level as the beginning of the year. Currencies across Letshego's markets, particularly Nigeria and Kenya, experienced material depreciation during the period. It is projected that currencies will weaken further in 2023 and remain sensitive to external global events.

Letshego's business demonstrated resilience in the face of these challenging conditions. The company's Transformation Strategy is well underway, supported by a strong balance sheet driven by a 5% increase in net loans and advances and well-diversified funding. Despite the headwinds, Letshego closed the half-year with a solid cash position.

Interest income from advances grew by 6% year-on-year, while interest income from mobile lending recorded an impressive growth of 42%. However, the increasing interest rate environment dampened the net interest income. The company's performance was buoyed by a 33% year-on-year growth in insurance income, supporting its non-funded income performance.

Cost efficiency measures implemented by Letshego resulted in a 5% reduction in the cost base, achieved through improved efficiencies, targeted cost rationalization initiatives, and the implementation of an automation and tech-focused "Target Operating Model." Profit before tax declined by 7% compared to the same period last year, primarily due to volatile currency movements in Nigeria and Ghana. However, profit before tax and foreign exchange gain increased by 4% year-on-year, excluding the impact of foreign exchange fluctuations.

Letshego has made significant progress in the Turn Around Market cluster, which includes Kenya, Tanzania, Rwanda, Nigeria, and Ghana. Despite exchange rate volatilities in some of these markets, the company focused on boosting business fundamentals through people development, distribution model enhancements, product selection, and product relevance. Strategic partnerships were established and deepened, contributing to increased customer access to scalable customer ecosystems in Nigeria, Kenya, and Tanzania.


source : Letshego Results 

The cost-to-income ratio within the Turn Around Market cluster significantly improved from 78% to 69% year-on-year, despite incurring one-off costs related to organizational restructuring and branch rationalization. Letshego aims to further improve the cost-to-income ratio within the short term, targeting a range between 50% and 55%.

In Tanzania, Letshego successfully completed the amalgamation of its two subsidiaries to form a more efficient entity called "Letshego Faidika Bank Limited." The Fit for Growth markets, particularly Namibia, Mozambique, and Botswana, contributed significantly to the group's profit, with insurance income exhibiting growth in these markets.

Letshego has also made strides in its Environmental, Social, and Governance (ESG) journey. The company published its second Impact Survey, reaffirming its commitment to improving lives and achieving a marked impact in supporting local economic development while aligning its ESG strategy with international standards.

The company's accomplishments were recognized at the 2023 African Banker Awards, where Letshego Nigeria won the AFAWA Award (Affirmative Finance Action for Women in Africa). This award highlights Letshego's efforts in empowering women, with over 60% of its customers being women in 2022, a significant increase from just over 20% in 2019.

Letshego's capital base remains solid, with a capitalization ratio of 32%. All subsidiaries within the group are well capitalized, providing a strong foundation for future growth and resilience.

Despite the challenging macroeconomic environment, Letshego Holdings Limited has demonstrated its ability to navigate and thrive. The company's strategic initiatives, strong balance sheet, and focus on cost efficiency position it well for sustainable growth amidst the ongoing recovery in Sub-Saharan Africa's economies.


Letshego Holdings Limited acknowledges the existence of risks to the economic prospects of 2023/24 and remains vigilant in monitoring them. The group is particularly attentive to potential inflationary flare-ups that may arise from factors such as the intensification of the Russia-Ukraine war, the effects of El Nino leading to prolonged drought spells and extreme temperatures, and ongoing geo-economic fragmentation. Additionally, the risk of debt distress and debt servicing is being closely monitored, with specific focus on Kenya, Mozambique, and Nigeria. The recent suspension of funding for Uganda by the World Bank may also impact the country's fiscal and budgetary gaps, potentially affecting its short-term economic prospects. Letshego is closely watching political risks in the Sahel region and ECOWAS' response to assess the security, economic, and foreign policy implications for its operations in Nigeria and Ghana.

Despite the persisting challenging macroeconomic conditions, Letshego Holdings Limited remains committed to pursuing its 6-2-5 strategy. The ongoing implementation of Plan 5, coupled with the positive developments observed in the East and West markets, reinforces the group's confidence in the relevance and achievability of its Transformation Strategy. Letshego has made strategic investments in technology and human capital to sustain its momentum and shape itself into a future-fit organization. The group will continue to prioritize deepening its core portfolio in Deduction at Source while exploring and learning from new inclusive finance solutions that support product diversification.

Analyst Comment (Respect Gwenzi, Chief Analyst at Equity Axis):

"The macroeconomic risks identified by Letshego Holdings Limited are crucial factors to monitor in the coming months. The potential inflationary pressures arising from geopolitical tensions and weather-related events could have significant implications for the economies in which the group operates. Additionally, the risk of debt distress and the suspension of funding for Uganda pose challenges to the fiscal stability of these countries. Letshego's focus on its Transformation Strategy and commitment to geographic rebalancing through technological investments and product diversification demonstrate a proactive approach to navigating the current economic landscape. Continued monitoring of political risks and close attention to market dynamics will be vital for Letshego's sustained growth and resilience in the region."

-Equity Axis News