BDC Invests $10 Million in Letshego to Boost Social Impact Lending
The Botswana Development Corporation (BDC) has committed a substantial US$10 million (P131 million) term loan to Letshego Africa Holdings. This seven-year agreement aims to bolster Letshego’s capacity for lending in crucial social-impact sectors. The funding aligns with BDC’s strategy to combine financial returns with tangible social benefits.
Targeting Key Development Areas
The BDC’s investment will support programmatic lending initiatives across critical areas. These include affordable housing, education, healthcare, and finance for micro and small enterprises. This approach highlights a commitment to fostering development and economic inclusion within the region.
A Strategic Partnership for Dual Returns
BDC’s Managing Director, Oteng Keabetswe, described the facility as more than just a funding agreement. He emphasized its role as an ‘investment in the resilience of the African household.’ This statement underscores BDC’s focus on partnerships that deliver what it calls ‘double-bottom-line’ returns: financial sustainability alongside demonstrable developmental impact.
Strengthening Letshego’s Market Position
For Letshego, the funding arrives at an opportune moment. Local capital markets have presented challenges due to increased costs and reduced liquidity. Letshego Chief Executive Reinette van der Merwe stated the loan enhances liquidity flexibility, crucial for the group’s ongoing growth and recovery. It also strengthens their ability to navigate macroeconomic volatility.
The new funding contrasts sharply with recent market conditions. Letshego previously secured P89.5 million through its medium-term note program at yields between 18% and 18.5%. This indicated some of the highest borrowing costs the group had encountered recently.
Supporting Affordable Lending and BDC’s Evolving Strategy
The loan’s structure is designed to sustain lending within Letshego’s lower-risk payroll-deduction portfolios and other programmatic products. These areas have experienced tightening access to affordable funding. For BDC, this transaction reflects a more proactive balance-sheet management, following recent portfolio restructuring efforts. The corporation reported a return to profitability in the fiscal year ending June 2025, although liquidity pressures continue.
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