Moody’s affirms Letshego’s credit rating

Letshego Holdings Limited said its credit rating by Moody’s Investor Service (Moody’s) has been maintained adding that the outlook was stable. The ratings agency stated that the ratings assigned to Letshego capture the company’s solid capitalisation buffers and profitability; supported by high margins.

“Pursuant to the Terms and Conditions of the Letshego Holdings Limited (Letshego) ZAR 2,500,000,000.00 and BWP2,500,000,000 Medium Term Note Programme (the Programme), Noteholders are advised that Moody’s Investor Service (Moody’s) has affirmed Letshego Ba3/ Not Prime issuer rating and assigned Ba2 Corporate Family Ratings (CFR),” said the consumer lender in stock exchange filing.

Furthermore, the rating balances these strengths against Letshego’s; sensitivity of its credit profile to changes in regulatory and legal frameworks; high exposure to foreign exchange risk; and elevated asset quality risks, and dependence on market-sensitive wholesale funding; although actions are being taken to address this weakness.

Moody’s also said the outlook on Letshego is stable. “The stable outlook reflects Moody’s expectation that the company’s financial fundamentals will remain robust over the next 12 to 18 months horizon, despite elevated credit risks from its regional expansion.”

Letshego which is headquartered in Gaborone has been publicly listed on the Botswana Stock Exchange (BSE) since 2002. It is an inclusive finance focused Group with microfinance banking and consumer lending subsidiaries across eleven countries in sub-Saharan Africa.