Africa’s service providers eye opportunity in microfinance growth
Pan-Africa financial services group Letshego believes technology advances will positively influence further adoption of innovative microfinance services.
The company says the microfinance market is anticipated to steadily grow over the next few years, as a rapid rise in the number of micro, small and medium enterprises is anticipated.
“This creates a clear opportunity for mobile money services,” said Enos Banda, Letshego Board Chairman.
He cited that the development could leverage the increasing availability of 4G, encouraging the rapid uptake of smartphones on the continent.
“Ours is one of the least penetrated continents in the world, with just forty-five percent of the population owning one or more SIM cards. The result is a highly attractive sector – in which a strong vision and outstanding execution are key to success,” said Banda.
Banda’s observation comes after Letshego adopted a digital transformation strategy in 2020, whose resilience was aggressively tested due to global COVID-19 measures and impacts.
“COVID-19 pandemic led to our acceleration of a digitalisation strategy, proving that our future planning, as visualised in 2019, was well on point,” said Banda.
According to the company, the first phase of the transformation strategy was characterised digitising of customer access channels.
“Our success was truly phenomenal, from just 2% volumes in online applications at the start of 2020, to 69% by year end. Our success grew exponentially with the help of our ‘Digital Eagles’, an initiative to leverage our existing front-line talent to personally guide and empower our customers to transition from traditional to digital access channels,” said Banda.
He also highlighted that for micro and small entrepreneurs (MSE), automation helped improve credit decisions, collections and recovery efforts.
Meanwhile Letshego has launched its LetsGo mobile digital platform to provide customers with an entry point for everyday transaction and saving needs at a cost-effective rate, with pay-as-you-use fees.
Banda said although initial launches bring existing customers up to par with the convenience of accessing loans and their accounts via mobile devices, ongoing evolutions will mean LetsGo will enable customers to pay, get paid, save, borrow and access newer options such as insurance.
“This ‘digital mall’ of interoperable and shared services will increase customer ‘stickiness’ and transaction volumes, while creating new business opportunities,” said Banda.