By: Thoboloko Ntšonyane

MASERU

Financial inclusion is no longer an option but a necessity for shared prosperity.

The launch of the MSME Finscope Survey and the National Financial Inclusion Strategy (NFIS) 2024-2028 has been hailed as a transformative step towards ensuring that all Basotho, regardless of their socioeconomic status, have access to financial services that can improve their livelihoods.

Financial inclusion should not only be about access but also about meaningful participation in the economy.

On behalf of the Minister of Finance and Development Planning, Prof Ntoi Rapapa pointed out that the country faces high poverty levels and lost gains in sustainable development, inclusive financial policies are fundamental to reshaping the economy.

He said the government is committed to financial inclusion is demonstrated through key initiatives that seek to remove barriers to financial access for marginalised groups, particularly women, youth, rural populations, and informal businesses. These groups have historically been excluded from mainstream financial services, limiting their ability to build sustainable livelihoods.

According to FinMark Trust, around 66% of Basotho were using mobile money services as of 2021, significantly boosting financial inclusion.

Data from the Federal Reserve Bank of St. Louis shows that active mobile money accounts in Lesotho increased from 1,131,945 in 2021 to 1,398,563 in 2023.

Through access to financial services and leveraging technology, the NFIS II reportedly aims to bridge this gap, ensuring that financial products are both accessible and affordable.

Experts have said the financially informed population is more likely to make sound financial decisions, save for the future, and engage in productive economic activities.

The strategy also prioritises digital financial services, which have the potential to expand financial access while reducing costs. The rise of FinTech solutions and mobile money platforms has proven to be a game-changer in increasing financial accessibility, particularly in rural areas where banking infrastructure is limited.

Financial inclusion, the Minister mentioned that they must be accompanied by strong regulatory frameworks that protect consumers and ensure the stability of the financial sector. Without effective oversight, there is a risk that financial inclusion could become a channel for fraudulent activities, exploitation, or excessive debt burdens.

Meanwhile, the NFIS II outlines the importance of consumer protection policies and stronger financial sector governance.

He indicated that collaboration remains a cornerstone of success, advocating that the government, private sector actors, civil society, and development partners must work together to implement inclusive and innovative financial solutions.

Prof Rapapa pointed to strategic interventions such as the Sustainable Agricultural Development Project (SADP II), the Competitiveness and Financial Inclusion Project (CAFI), and the MCA Business Environment and Technical Assistance (BETA) project that offer opportunities for investment and private sector engagement.

The Central Bank of Lesotho’s (CBL) Governor, Dr Maluke Letete highlighted that the 2016 FinScope MSMEs survey recorded a 65% inclusion rate, with banks serving 41% of the population, non-banks only 4%, and 20% relying on informal financial services. In response, the

CBL prioritised creating an environment that facilitated the transition from financial exclusion to inclusion. Mobile money played a pivotal role in expanding financial access, contributing to a rise in formal financial inclusion from 60% in 2011 to 87% in 2021, according to the FinScope Households 2021 survey.

However, the Governor noted that despite this progress, challenges remain in financial literacy, consumer protection, and the effective usage of financial services. “Now that we have achieved 91% inclusion in terms of access, we cannot let our guard down. Serious challenges lie ahead, but with every challenge comes an opportunity,” he remarked.

Emphasising that financial inclusion is not merely a noble initiative but an economic imperative, the Governor outlined key pillars of the NFIS 2024-2028: financial education, consumer protection, and risk management; development of tailored financial products for MSMEs, farmers, and productive sectors; digitisation and expanded usage of financial products and strengthening collaboration and creating an enabling financial environment

The Central Bank reaffirmed its commitment to spearheading financial literacy initiatives, enhancing consumer protection frameworks, improving risk management strategies, and supporting digital financial innovations. The Governor also pledged to refine the regulatory environment to foster financial sector growth while mitigating risks.

The strategy, approved by the Cabinet under the leadership of the Prime Minister, was developed in partnership with organisations such as SADC, the European Union, the World Bank, CAFI, FinMark Trust, and UNDP.

“Let us leave no one behind as we leverage high access to drive usage of quality products that improve the lives of households and grow small businesses in Lesotho,” said the Governor.