By Thandiwe Kubere and Ts’oloane Mohlomi
MASERU – Standard Lesotho Bank in its bid to facilitate responsible loaning methods launched a new and modern banking system, which aims to modify loaning alternatives to Basotho on a wider scale.
The novel banking system dubbed New Lending Proposition for Personal Banking, was launched yesterday in Maseru, and is hailed for its innovative contribution in the country’s private banking sector.
Speaking at the launch, Standard Lesotho Bank’s Head Personal and Private Banking, Mr Rethabile Motsoahae explained that the new value proposition is basically the bank’s revived commitment to providing a better banking experience to the public. He said it has thus challenged them to think outside the box in ensuring they bring new and relevant solutions which are aimed at assisting customers in achieving their dreams.
“We spend sleepless nights thinking of how best we can make life easy for our customers and how best we can add value to our economy. For us, the new lending CVP that we launch today is not just about banking, but about demonstrating that we understand the needs of our customers and the requirements needed to make them enjoy what standard Lesotho Bank has to offer”, he said.
Motsoahae declared that the bank is constantly looking for new strategies to make sure that customer requirements are met. This includes observing trends in the world to figure out what it is that can be adopted within the confines of convenience and affordability.
Having a vision of putting their customers at the center of everything, the bank apparently engaged with clients and solicited their views to inform them of the changes in the lending methods which they believe address today’s challenges. Motsoahae said lending is one of the main components of SLB.
The purpose of the customer value proposition is aimed at ensuring that lending is conducted in a responsible manner, such that customers are still able to meet their other obligations and can live comfortably, whilst servicing their loans. “That is why we work based on what is called Installment to Income Ratio (ITI), when we offer loans”, said Motsoahae He said the ITI calculation is based on the client’s net income, which has been revised up to 60% for valued clients.
This means that customers are now able to borrow more money than they used to, particularly government & private sector employees. “We have made this improvements to enable Basotho to use our lending solutions to particularly create wealth, buy assets and meet their critical needs such as paying schools, starting a business, developing income generating means.
The blue bank of Lesotho has further advanced to offering access to loans not only to their clients but the nation at large on their digital gadgets. This means after following the guided procedure they can now get instant loans through digital channels. This has been explained to be one of the radical transformations of loaning experience for clients. In the event that a customer has not received a digital loan offer, they get assisted at close branches or on a toll-free number.
Previously, there was a waiting period of three months for loan applications, which has now been waived to afford customers a chance to access loans anytime convenient for them as long as they are within the 60% ITI and have a good account conduct.
In the period between now up to 31st July, the bank guarantees a cashback amount to its clients ranging from M5,000 to 20,000 when they take the unsecured personal loan solution with a minimum loan amount of M150,000. The cash back tied with the loan amount allows customers to invest on something worthwhile, or buy an asset and more to improve their lifestyle.
The secured lending proposition also includes home loans and vehicle & asset Finance (VAF) where customers can finance their assets. This was driven by a goal of enabling more Basotho to become home-owners instead of tenants. Similarly, the ITI has now increased up to 60%, meaning that customers who could not ordinarily afford to have a home can now afford and can acquire homes of a higher value than before. The home loan term has now increased from 20 years to 30 years, thus offering clients a longer repayment period, with affordable installments.
Additionally, during this period until the 31st August, clients are guaranteed cashback ranging from M10,000 to M30,000 when they obtain the home loan solution with a minimum amount of M100,000. With this, customers can cover annual insurance premiums, valuation report and legal costs associated with home loan process.
“On VAF as part of our secured lending offering, we primarily finance assets such as vehicles, yellow plant, trucks, or any type of machinery that has a serial number, using a pay slip”, Motsoahae said. This can be machinery for starting a business. “On VAF, I am delighted to inform you that we provide the 1st month payment holiday for every customer that buys a car with us”. Here clients will get a guaranteed cash back amount ranging from M5,000 to M15,000 when they buy a car or asset with minimum loan amount of M300,000.
In raising awareness about the importance and benefits of using money wisely, and providing over all financial literacy, Mr Tokiso Nthebe, who’s a financial wellness coach and educator disseminated information about the right financial conditions of when one can consider taking a loan.
Since individuals take loans for different reasons he said it is always advisable to do so when it is absolutely necessary. He spoke about good and bad debts. Good debts are those taken for important reasons like buying a home, a car really needed for transportation purposes, paying school fees for children and getting a loan as an investment for possibly profitable business.
He shared information about credit scores, which are data that indicates the eligibility of an individual to qualify for a loan. Credit scores are important as banks give priority to borrowers who are less susceptible to breaching financial lending conduct like that of failing to furnish off a loan on time as was previously stipulated in a contract. Individuals were advised on ensuring they maintained a good credit score.
A satisfied client of SLB Ms Makatleho Kheechane said she was thankful to the Bank for their unwavering support over the years. She said the bank had successfully furnished her with loans at reasonably affordable prices.
In closing, SLB said they strongly believe with the right lending for the right objectives, they can bring change in the lives of Basotho households, which ultimately translate into the revival of the economy at large. “We capacitate & urge our clients to use our client-centric lending solutions to create wealth, buy assets, invest on worth-while businesses and meet their needs such as paying for school/tuition fees.” Motsoahae said this is even more critical as the country is still recovering from the effects of Covid 19.
In closing, SLB said they strongly believe with the right lending for the right objectives, they can bring change in the lives of Basotho households, which ultimately translate into the revival of the economy at large. “We capacitate & urge our clients to use our client-centric lending solutions to create wealth, buy assets, invest on worth-while businesses and meet their needs such as paying for school/tuition fees.” He said this is even more critical as the country is still recovering from the effects of Covid 19.