Rural Lesotho/Shutterstock

7 November 2023

What drives Lesotho’s financial inclusion success?


The Central Bank of Lesotho has been an AFI member for over a decade. Since then, the country has reached 90 percent financial inclusion. Central Bank Governor, Emmanuel Maluke Letete, explains why this success is primarily based on collaboration between various stakeholders and their determination to put the needed infrastructure in place to boost financial inclusion.



Laying the foundation for financial inclusion

It all started with a clear vision to financially include the unbanked population. Lesotho is a mountainous, landlocked country with over 75 percent of the population living in rural areas – some of which are remote and difficult to reach. Initially, many of these communities didn’t have access to banking services. These unique conditions made it imperative for the country to establish an alternative financial inclusion model.

In the beginning, we still lacked baseline power stations, electricity, and road infrastructure across the country. Leadership from various institutions decided to build the necessary infrastructure, including a modern payment system. This enabled a significant percentage of the population to connect digitally – in return, guaranteeing the successful uptake of mobile payment systems countrywide. All this helped bring us closer to what today represents Lesotho’s 90 percent financial inclusion rate. 

Another key element was the country’s digital ID system. Built on biometric technology, 90 percent of the country’s adult population of about 1.4 million people now have access to digital IDs. This gave visibility to populations that were formerly unregistered and simplified access to financial products and services – again, rapidly expanding financial inclusion.

Lastly and most importantly was raising awareness among the population about financial inclusion. This was critical in narrowing the gender gap in financial inclusion and removing stereotypes specifically related to women and youth. This initiative continues to be supported by consumer protection laws that serve to prevent discrimination and data privacy breaches against individuals and to instill confidence in digital payment systems.

Preserving what we’ve achieved

Achieving 90% financial inclusion in terms of “access” is very encouraging, but now we need to maintain this momentum by addressing the “use” of financial inclusion. The best way to do this is to ensure interoperability within Lesotho’s national payment system so that individuals who are financially included can transact hassle-free. But we are also expanding our vision to include digitalization of government payments and innovative Fintech like central bank digital currencies, which we hope will simplify cross-border payments and further strengthen our financial inclusion agenda.

Another priority is financial literacy which, in my view, is a key ingredient for financial inclusion success. The Central Bank of Lesotho has been providing financial literacy opportunities for many years. Our primary focus is on familiarizing our young people with the financial products and services at their disposal and how to use them responsibly. Here, consumer protection and market conduct play a very important role. It is crucial to understand that it is not enough to simply financially educate and financially include people – we must also protect them. The Central Bank is in the process of passing a set of laws to govern market conduct and enable consumers, especially youth, to enjoy the full benefits of financial inclusion safely. 

At the Central Bank, we continue to work with partners and stakeholders to boost financial inclusion nationwide. We are currently collaborating with Lesotho’s government to expand and diversify digital payment options for government services through mobile money services like M-Pesa, Eco-cash, Khetsi, C-pay, and My-wallet.

Financial inclusion success depends on the whole nation, and central banks cannot achieve it alone. Lesotho has proved that multiple stakeholders are critical to establishing a solid, sustainable infrastructure for financial inclusion.



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