Letshego is showing signs of an operational turnaround after years of financial strain, with its FY 2024 results revealing a company fighting its way back toward profitability through stricter risk management and a sharper focus on its core lending products.
Although the pan-African microlender still reported a net loss of of P70 million, a notable decrease from the P149 million recorded the previous year.
Profit before tax surged by 91% year-on-year to P232 million, up from P121 million in 2023, a milestone the company attributes to resilience in its Deduction at Source (DAS) lending model and a rebound in key southern African markets like Namibia, Botswana, and Mozambique.
The company’s top-line growth was underpinned by steady demand for salary-backed loans — long Letshego’s bread and butter — and a surge in short-term mobile lending products, particularly in Ghana and Tanzania. Insurance products in Namibia and Mozambique also contributed a meaningful stream of non-interest income, helping the group diversify beyond pure lending revenues.
However, despite these green shoots, the path to full recovery remains bumpy. Credit impairments increased by 71% to P979 million, as Letshego took a more aggressive approach to writing off old, underperforming loans. Particularly in East Africa, markets like Kenya and Lesotho continued to struggle with weak loan repayments, forcing the group to tighten underwriting standards and adjust its risk models.
Letshego also faces high, although improving, rate of non-performing loans which came in at 8.4% from 9.6% in the previous year. Strategic write-offs and intensified collections efforts helped lower its portfolio at risk, but new defaults in some markets signal that consumer stress remains elevated.
"Strong double digit growth in both PBT and operating income affirms that our business foundations remain sound. We are also encouraged by how well our short term loans have grown in Ghana and Tanzania. Our net loss position, although improved, shows we still have more work to do on balancing tax efficiencies," said Group Interim Chief Executive Brighton Banda