Moody's Investors Service has affirmed Letshego Holdings Limited's Ba3/Not Prime issuer ratings and changed the outlook to stable from negative.
The rating affirmation and change in the outlook was driven by the reduced risk of authorities in Botswana imposing restrictions on Letshego's payroll deduction business model; and Letshego's increasingly resilient credit profile and increasing geographic diversification, which provides a buffer against adverse changes to the regulatory and legal framework in the countries in which it operates.
“Letshego's ratings remain constrained by the company's narrow business model, with a high reliance on payroll deductions for loan repayment collections that expose the company to potential regulatory and legal changes, and high exposure to foreign exchange risk.”, Moody’s said.
Letshego is the first consumer lending company to be established in Botswana and is still the leading provider of unsecured credit to Botswana. Letshego was established to provide unsecured loans to formally employed clients.
The company, listed on the Botswana Stock Exchange, has already acquired banking licenses in Mozambique, has received a deposit-taking license in Rwanda, and is in the process of acquiring a banking license in Namibia.
