Lesotho’s Financial Inclusion Day highlights strong call for collaboration & FinTech in advancing financial inclusion

Central Bank of Lesotho (CBL), with support from the Alliance for Financial Inclusion (AFI) and other stakeholders, organized a national forum themed, “Broadening the Horizons For All” in recognition of Lesotho’s Financial Inclusion Day. Held on 29 November 2018 in Maseru, Lesotho, the forum addressed collaboration and FinTech for Financial Inclusion. This is the first time that the CBL is organizing Financial Inclusion Day.

“We are gathered today to reflect on the progress we are making as a country in the financial inclusion space, but we cannot get it right if we don’t involve other partners who may be ahead of us in this journey,” said Hon. Minister of Finance, Dr. Moeketsi Majoro during his opening remarks.

Supporting the theme of the national forum, Dr. Adelaide Matlanyane, Governor of CBL emphasized that “the story of financial inclusion in Lesotho is a result of closer cooperation between different stakeholders and partners.”

Lesotho’s Financial Inclusion Day serves as a platform to share news on economic advances in the region, create awareness on the importance of financial inclusion, discuss regulatory and policy advances, and assess the challenges and success factors in advancing financial inclusion. “Most importantly, [the national forum] will provide an opportunity to draw lessons from pioneers in financial inclusion,” added Dr. Matlanyane in her opening remarks.

“Are our financial inclusion policies helping to lift people out of poverty. What more can we do?” a pivotal question posed by AFI Deputy Executive Director, Norbert Mumba in his opening remarks. The country’s mountainous landscape and challenging geography make it expensive for CBL to expand its services for reaching the most rural population. “We cannot effectively broaden our financial inclusion horizons if the vulnerable segments of the society are left behind, due to unfriendly policies, regulations, approaches and structural issues,” she added.

Despite persistent challenges, “Lesotho’s financial inclusion levels are comparatively high,” highlighted Hon. Minister of Finance, Dr. Majoro. The country reached 41 percent of banking penetration in 2016, compared to these statistics in 2012 — 47 percent for Republic of South Africa, 22 percent for Malawi, 14 percent for Zimbabwe, and 9 percent for Mozambique.

Initiatives undertaken to promote financial inclusion are part of Lesotho’s Financial Sector Development Strategy (FSDS) that was one of the implementing strategies of the National Strategic Development Plan (NSDP). To date, 69 percent of the strategy has been completed, resulting in a series of legislative and regulatory reforms including the Financial Institutions Act 2012, Insurance Act 2014, and the National Payment Systems Act 2014.

“By addressing key themes such as poverty alleviation, inclusive growth, reducing inequality, gender and youth empowerment and others, the [Lesotho] National Inclusive Finance Strategy also seeks to support the Lesotho government in achieving the SDGs,” said Dr. Majoro in his opening address.

Governor of CBL, Dr. Matlanyane added that “the impact [of these reforms] has been phenomenal on the economy of Lesotho. The structure of Lesotho financial sector has evolved to now having a credit bureau, stock market and diversified number of financial services providers. Access to financial services has also improved, evident by the increase in the bank accounts opened. The number of mobile money accounts has also increased.”

“The current digital revolution provides enormous opportunities for promoting financial inclusion … small markets like [Lesotho] can really make FinTech work for financial inclusion.”

FinTech has the potential to accelerate access and usage of quality financial services for all if appropriately harnessed through enabling policies and regulatory frameworks and approaches. During the 2018 AFI Global Policy Forum, the AFI network adopted the Sochi Accord on FinTech for Financial Inclusion. The Accord provides a framework for AFI members to leverage innovative new technology-based financial services, or FinTech, to advance financial inclusion globally. Learn more about the Sochi Accord and AFI’s work in FinTech for Financial Inclusion.

Hon. Minister of Finance, Dr. Majoro further emphasized collaboration as key to advance the country’s financial inclusion journey, “what needs to be emphasized though is that these developments challenge sector players to collaborate more for greater impact.” He also highlighted that mobile money can be used as a channel to offer innovative and low-cost credit, savings and insurance products and significantly reduce the costs of transferring money compared to traditional forms of money transfer.

“If one thinks carefully about financial inclusion, one can appreciate that it has created opportunities, and brought hope for many of our people,” conveyed Dr. Matlanyane, Governor of CBL. Lesotho’s Financial Inclusion Day provided the valuable opportunity for leading experts and international stakeholders to share knowledge and unique perspectives in advancing financial inclusion.

The national forum was attended by international stakeholders and financial inclusion experts from the public and private sector including the UN Resident Coordinator and UNDP Resident Representative in Lesotho, Salvatore Niyonzima; World Bank Country Manager, Janet Entwistle; and Finmark Tust Representative, Damola Owolade. Prof. Florens Luoga, Governor of the Bank of Tanzania (BoT) was represented at the event. A pioneer in the financial inclusion space and an active member of the AFI network, BoT shared practical examples of their journey at the national forum.

Central Bank of Lesotho (CBL) is part of the AFI Gender and Women’s Financial Inclusion Committee (GWFIC), guiding the network on effective implementation of programs that will reduce the global gender gap in financial inclusion.