- BoB rejected Letshego in 2013
- BoB’s banking entry requirements tough
Blue chip microfinance firm, Letshego Holdings Limited may have succeeded being granted banking licenses in other African countries, but has opted to bandone its pursuits here in Botswana, fearing the tough Bank of Botswana (BOB) entry requirements which it is yet to meet, according to sources.
Bank of Communications Manager Mareledi Selabe announced that Letshego Bank Botswana Limited, which had applied for a commercial banking licence has withdrawn its application. “The application by Letshego B Botswana Ltd was published in the Government Gazette of October 19, 2018,” she said, omitting to reveal reasons why Letshego, a pan African micro-finance firm decided on the action. However, Letshego’s reasons are that new group boss Smit Crouse wanted to first handle the group’s financial inclusion strategy before jumping into Botswana’s banking license issue. This is however, despite the fact that a license was already submitted at the BoB, which they had to withdraw.
Smit Crouse was appointed the Group Chief Executive Officer (CEO) of Letshego at the end of September last year as part of Letshego Group Board’s ambitions to position the organisation for the future.
Crouse said he has been making strong progress on his First 100 Day Plan in engaging with as many stakeholders as possible on Letshego’s current, and potential impact in financial markets across the continent. He said Letshego Group has chosen to put its application for a Botswana Banking License on hold to enable the financial inclusion entity to focus on the ongoing consolidation of recent acquisitions, and embed the launch of new solutions across its 11-market footprint.
Commenting on the decision, Smit Crouse said Botswana remains core to the Group, and a Banking Licence in this market remains a valued opportunity to support local growth and expansion. However, he said an application of this significance needs to be done at the right time within Letshego’s journey.
Letshego Group’s current priorities include the Group’s acquisition of afb Ghana in 2017, the launch and strategic refinement of ‘LetsGo’ (Letshego’s all-in-one solution), the Group’s card offering in targeted markets, as well as the end-to-end automation of Letshego’s customer application process.
While Crouse argues that he first wants to deal with issues of consolidation, highly placed sources are of the view that Letshego had submitted then withdrawn its application to reconsider the key assumptions and proposals. “They took it back to go and rethink it,” they said.
Apparently, Letshego is having a hard time cracking through BoB’s stringent banking license requirements. There are market players who are expected to launch a campaign geared at compelling the BoB to loosen its entry requirements, particularly for Botswana-based or citizen-owned corporates. Members of Parliament have also mounted an effort against the current licensing regime, taking Finance Minister, Kenneth Matambo to task last year during budget debates. The local banking industry is a cut-throat arena, with the big five banks controlling 90 percent of total assets, deposits and loans, leaving little room for the other five to thrive.