Letshego, a financial services provider focusing on micro loans, has shown remarkable financial performance in the first half of 2024 displaying resilience despite tough macroeconomic conditions.
Profits before tax surged by 223 percent, climbing from GH¢18.34 million to GH¢59.3 million compared to the same period last year. Total assets increased by 47 percent to GH¢1.71 billion, largely due to a 36 percent rise in net loans and advances, reaching GH¢1.1 billion.
At the same time, Customer deposits surged by 325%, rising from GH¢69 million to GH¢294 million, indicating increased market confidence. Additionally, the cost-to-income ratio, which measures the company’s expenses relative to its income, improved to 51%. An 18% reduction from the previous period shows that the company has become more efficient in managing its operational costs, spending less to generate each unit of income.
Nii Amankrah Tetteh, Chief Executive Officer of Letshego Ghana, remarked during a Facts Behind the Figures session hosted by the Ghana Stock Exchange, “The first half-year results demonstrate the resilience and adaptability of our business model. Despite the challenging macroeconomic environment, we have delivered strong financial results while advancing our strategic initiatives.” This follows their performance in 2023, where they recorded a post-tax profit of GH¢66 million, up from GH¢37 million at the end of 2023.
A major contributing factor in this performance was the company’s Qwikloan product, which saw a 498% increase in disbursements, reaching GH¢2.8 billion in the first half of 2024, up from GH¢476.5 million in the same period of 2023. There was a 114% year-on-year growth in customers in peri-urban markets and a 5% increase in lending to women and women-owned businesses, which made up 34% of disbursements.
Mr. Tetteh highlighted the socio-economic impact of Qwikloan: “Qwikloan is not only generating shareholder value but also making a significant socio-economic impact. It plays a crucial role in supporting small-scale entrepreneurship and addressing critical financial needs, especially for women and young people across Ghana,” as 66 percent of loans were given to people 34 years old or younger.
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Poelo Mkpayah, Chief Financial Officer, shared that the product, which accounts for 60% of Letshego Ghana’s portfolio mix, has served over 6.5 million customers. An analysis of customer purposes for accessing Qwikloan showed that 37% of borrowers used funds for business activities, 24 percent for school fees, and 15 percent and 8 percent for emergency situations and medical expenses, respectively. The product has cumulatively disbursed GH¢18.8 billion to date.
Going forward, Letshego Ghana plans to issue a second GH¢100 million bond under its expanded GH¢500 million medium-term note programme by the end of the third quarter of the year. This follows the successful issuance of its first GH¢100 million bond in April 2024, which was oversubscribed by more than 40%.
As of June 2024, the outstanding value of Letshego’s bond programme stands at GH¢230 million. With GH¢75.9 million set for redemption in Q3 2024, the company retains GH¢270 million for future issuances under the note programme. Mr. Tetteh elaborated on the company’s future strategy, saying, “We remain committed to driving innovation and delivering value to our stakeholders. The forthcoming bond issuance will provide capital to underwrite new and existing products, support balance sheet growth, and fund working capital and liquidity management activities.”
