Pan-African financial services provider Letshego Africa Holdings Limited has reported its unaudited financial results for the year ended December 31, 2024.
The company experienced a mixed performance, with growth in some key revenue areas but a widening net loss, reflecting economic headwinds and credit risk challenges across its markets.
Revenue Growth and Lending Performance
Letshego’s total operating income for 2024 reached P2.87 billion, reflecting a 25.7% increase from P2.28 billion recorded in 2023. This was primarily driven by higher interest income, which rose to P3.93 billion, up from P3.42 billion the previous year.
Net interest income, which represents the profit Letshego earns from lending activities after subtracting the cost of funds, climbed to P2.33 billion in 2024, up from P1.77 billion in 2023. The increase was mainly due to an expansion in customer loans and advances, which rose to P14.54 billion from P14.35 billion.
However, interest expenses—the cost Letshego incurs to borrow funds—remained high at P1.58 billion, reflecting the impact of rising interest rates in several of its markets.
Rising Credit Risks and Loan Impairments
Despite revenue growth, Letshego faced higher loan impairments and credit losses, which increased to P979 million, up from P858 million in 2023. The company attributed this to economic pressures, a rise in non-performing loans, and operational challenges related to loan repayment collections, particularly in mobile and individual lending products in Botswana, Kenya, and Lesotho.
Letshego's non-performing loan (NPL) ratio improved slightly to 8.4% from 9.6% in 2023, indicating a modest recovery in collections and recoveries. However, the company warned that further economic volatility could impact asset quality going forward.
Profitability Challenges and Net Loss
The company reported a net loss of P70.14 million, an improvement from the P148.80 million loss in 2023. While operating income grew, higher provisions for bad loans, coupled with taxation expenses of P302.6 million, continued to weigh on the bottom line.
The loss attributable to shareholders stood at P135.77 million, while non-controlling interests recorded a profit of P65.62 million, signaling varying performance across Letshego’s subsidiaries.
Regional Performance: Strength in Some Markets, Weakness in Others
Among Letshego’s regional operations, Botswana, Namibia, and Mozambique remained key revenue drivers. Botswana contributed the highest operating income at P762 million, followed by Namibia at P639 million and Mozambique at P573 million.
However, weaker performances were noted in Kenya and Ghana, where loan impairment provisions rose significantly. Letshego attributed this to economic instability, regulatory changes, and shifts in consumer behavior.
Liquidity and Capital Position
The company maintained a solid liquidity position, with cash and similar instruments increasing to P1.66 billion from P1.40 billion in 2023. Borrowings also rose slightly to P9.68 billion, reflecting the company’s continued funding requirements.
Looking Ahead
Letshego’s management remains cautious about economic conditions in 2025, with a focus on strengthening risk management, enhancing loan recovery efforts, and optimizing its product portfolio. The company is also looking to expand its digital financial services and improve efficiencies across its subsidiaries.
Despite ongoing challenges, Letshego believes its strong presence across Africa and commitment to financial inclusion position it for long-term growth.