International Finance Corporation (IFC), a member of the World Bank Group, recently invested USD 20 million (SZL 147 million) in Micro Provident Botswana, a leading consumer finance company commonly known as Letshego. The investment will help the company expand its financial products and services to under-served segments of the market through local subsidiaries, and support sustainable economic development in Botswana, Swaziland and Zambia. IFC will provide the loan in South African rands and Zambian kwachas by using local currency swap markets. The loan is part of a USD 50 million debt and equity financing package recently approved by IFC for Letshego, and marks IFC’s second investment in the company. The first was a seven percent equity stake acquired in 2005. The package is part of IFC’s strategy to enable more people to actively participate in the region’s financial markets.
IFC is a division of the World Bank Group that provides a variety of financial products and advisory services to businesses and governments, with the aim of promoting private sector development in developing countries. In 2007, IFC contributed USD 8.2 billion and mobilized an additional USD 3.9 billion for 299 investments in 69 developing countries. IFC is led by CEO and Executive Vice President Lars Thunnel.
Letshego is a pan-African consumer finance group, established in Botswana in March 1998 as the country’s first micro-lending company. Its unsecured loans target formally employed civil servants and select private companies. Letshego’s wholly-owned subsidiaries include: Letshego Financial Services, Letshego Guard, Micro Provident Uganda, and Letshego Financial Services (Uganda). It is also a major shareholder of Micro Provident Swaziland and Micro Provident Tanzania. According to the group’s interim financial report, in July 2007 it had total assets of BWP 640 million (USD 101.5 million). In addition to IFC, its major shareholders are: Netherlands Development Finance Company (FMO), Sanlam, Investec, and Kingdom Zephyr. Letshego does not currently report to MIX Market, the microfinance information clearinghouse, nor to a third-party performance evaluator.
By Mary Fu
Additional Resources:
International Finance Corporation (IFC): “IFC Invests in Micro Provident Botswana to Expand Access to Financial Services in the Region”
Micro Provident Botswana, Ltd.: About Us
Micro Provident Botswana, Ltd.: Interim Financial Report
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