Letshego targets 100% local funding by year-end

...deploys innovation to improve NPLs

By Kingsley Webora TANKEH

The Chief Finance Officer of Letshego Savings and Loans Plc, Poelo Mkpayah, has indicated that the company aims to achieve 100 percent local funding by year-end. According to her, this forms part of several measures being implemented to mitigate further losses due to FX volatility.

She revealed this during a virtual Facts Behind the Figures session with the Ghana Stock Exchange (GSE), following the company’s loss of over GH¢20million in asset revaluation due to the cedi appreciation, which impacted USD bonds.

She stressed that that loss affected the company’s overall profit. According to her, Letshego made GH¢33.2million profit in the first half of 2025 instead of GH¢85.7million, which would have been 45 percent higher than that of the previous year, due to the loss.

Speaking at the event, Mrs. Mkpayah declared: “The goal is full local funding by end-2025”.

To this end, management is aggressively increasing local funding to de-risk and shield the company from FX storms. She revealed that Letshego repaid over GH¢250million hard currency loans last year, further reducing FX volatility exposure. This shift in the company’s funding mix  increased local funding to 90 percent of the balance sheet, up from 61 percent.

Letshego’s total assets burgeoned to GH¢1.73billion, buoyed by an 8 percent increase in gross loans to GH¢1.3billion. This represents a marginal growth from the GH¢1.7billion recorded in H1 2024. Total liabilities upticked to GH¢1.4billion, representing a 2 percent increase.

Retail deposits also grew by 104 percent in H1, to GH¢133.5million. Customer deposits increased by 130 percent to GH¢674million. Interest income surged to GH¢444million, more than half of the total interest income of GH¢771million recorded in 2024. This represents a 19 percent growth from the GH¢358.6million recorded in H1 2024.

Despite this performance, the company has tightened its borrowing appetite. Total borrowing dipped to GH¢672million, from the GH¢864million recorded same time last year. This represents a 22 percent decline.

Impairment charge dipped marginally in the first half of 2025, declining from GH¢70.8million to GH¢68.3million. This represents a 3.5 percent decline.

While H1 2025 impairment showed improvement, challenges in securing timely write-off approvals could contribute to an uptick.

 

Letshego’s Non-Performing Loans portfolio has seen some improvements in the first half of 2025. Its NPL ratio, as at June 30, 2025,  was 12 percent, two points higher than the Bank of Ghana’s 10 percent cap.

The Chief Risk officer of Letshego, Ms. Akua Donnir, has revealed that automated robotic calls service – robocalls – has been deployed to improve the company’s Non-Performing Loans (NPLs) amid a strain in loan recovery from the traditional payroll lending (Deduction at Source – DAS), due to customers flying abroad for greener pastures.

She said the company faces a significant challenge in recovering loans given to payroll customers, affecting its bottom line. However, she revealed that this intervention has led to the recovery of GH¢10million and improved Letshego’s Non-Performing Loans portfolio.

As mobile lending – quick loans – remains the largest part of Letshego’s business, with a 98.8 percent loan recovery rate, she contended that there is the need to relook at the company’s credit scoring algorithm to stem loan delinquency and rid the most profitable portfolio of NPLs.

The micro lender witnessed robust revenue growth in 2024 and the first half of 2025,  but profits declined significantly due to operational costs and the impact of the cedi’s recent appreciation bout against the dollar.

The post Letshego targets 100% local funding by year-end appeared first on The Business & Financial Times.

Read Full Story