MASERU – THE Central Bank of Lesotho (CBL) launched an aggressive drive to raise awareness about the Lesotho Registry of Interests in Movable Assets (LERIMA) yesterday.
This move is a transformative step in improving access to credit and securing movable property rights for all.
LERIMA is a system developed to enhance access to finance for micro, small and medium enterprises to contribute to the reduction of the high unemployment level in Lesotho.
Bolebali Taasoana, data analyst at the CBL, said LERIMA contributes to financial inclusion.
“If the system is used more often Micro, Small and Medium Enterprises (MSMEs) will be able to give out credit and contribute to job security,” Taasoana said.
“LERIMA helps financial institutions to refine their collateral activities and lend more to customers,” he said.
“In this way, the financial institutions will establish products to satisfy the traditionally unbanked.”
He said a collateral registry enables businesses to use their assets as security to generate capital.
Taasoana said financial institutions have recourse in case of a default while for consumers it reduces the cost of credit.
With this collateral registry, creditors also benefit from extended repayment periods, he said.
Taasoana said businesses that registered with LERIMA systems have significantly improved access to finance.
Taasoana urged all MSMEs and companies to use the system more often because it will empower their businesses and provide them with more access to consumers to stimulate growth and job creation potential to enhance financial security.
Bafokeng Noosi, the CBL Head of Non-Banking Supervision, said LERIMA has enabled Basotho to access credit by allowing their movable assets as collateral by credit providers, including banks, microfinances and others.
Noosi said LERIMA has expanded access to credit not only for MSMEs but also for ordinary Basotho.
“What we want to see is participation in all the credit lenders and in all small and medium enterprises for more access to credit to small consumers,” Noosi said.
Noosi said they also want to see growth in businesses and movable collateral confidence in financial transactions, adding that they are going to be able to see that the financial infrastructure is enhanced.
LERIMA, he said, will allow the use of movable property as collateral for credit.
“This will help individuals and businesses to use valuable movable property as collateral to get business loans from banks,” he said.
He said banks that registered with LERIMA mainly accepted immovable assets as collateral for loans.
Many MSMEs, therefore, found it difficult to access credit because they lacked such assets.
Noosi urged all businesses and companies to register with LERIMA as it is more effective to lenders and the operations protect both the consumer and the creditor.
Phomolelo Molelengoane from Isach Holdings Credit Maputsoe said registering with LERIMA has helped him a lot in his business.
“It reduced the challenges we were facing with customers and payments,” he said.
In terms of operations, he said, it has supported them significantly and as a result, they are now seeing success and the business is growing.
Khahliso ’Molaoa
