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Lemohang Rakotsoane


SOON you might be able to use your cow, sheep, laptop, couch or mobile phone as collateral for a business loan.

That is if the Central Bank of Lesotho (CBL) and the Private Sector Competitiveness and Economic Diversification (PSC) get their wish.

And it looks like the idea, outlandish as it might seem, is already about to become a reality.

The central bank and the PSC are working together to build a secured transaction and collateral registry that will ease access to finance for individuals and Small Medium and Micro Enterprises (SMMEs).

“We are building a secured transaction and collateral registry, it is going to keep data of movable property that is to be used for collateral for accessing credit from banks and microfinances,” Bafokeng Noosi, head of Non-Banks Supervision at the CBL, said.

“Property will vary from cows, laptops to phones and other furniture even money that is expected to be received from somewhere,” he said.

Noosi was speaking at the review of progress of the secured transactions and collateral registry project on Thursday last week.

He said the system which is part of the financial sector reforms is aimed at easing access to finance for a lot of Basotho who were previously not able to get credit due to lack of collateral.

“CBL received a lot of cases whereby people’s properties had been illegally possessed by those running microfinances when they failed to pay their debts,” Noosi said.

“Now we are going to do it in a legal way to avoid possession of people’s property illegally. People will pledge their movable property as collateral and the system will not allow people to pledge the same property to different institutions as whatever property has been pledged will be in the system,” he said.

He emphasised that currently people go from one financial institution to the next with the same payslip to ask for credit giving false impressions of their ability to pay back the credit.

Noosi noted that it is their hope that this system will be used more by SMMEs more than individuals “as they will be getting credit for investment purposes and not for consumption”.

He said the legal and regulatory side of the reforms are close to completion. What is left, he said, is vigorous awareness campaign and training for retailers, mobile phone operators, judges, lawyers and the public.

Thabo Qhesi, chief executive of the Private Sector Foundation of Lesotho, a lobby group, said this initiative will remove several bottlenecks and ensure that a lot of SMMEs get the financial help they need.

“It is a good system. However, I foresee a challenge in terms of people ascertaining that the property is really theirs. Otherwise this initiative will have a big impact because currently when you do not have land, building or vehicles it is a challenge to get credit even if you have machinery,” Qhesi said.

“So, this will enable those SMMEs with only machinery, stock and furniture to get credit,” he said.

The secured transactions and electronic collateral registry is one of the reforms being undertaken to address bottlenecks within the financial sector.

According to Keith Whitelaw, a consultant lawyer who was speaking at the meeting, the system should encourage users to participate and not just be about the government telling people what to do in order for it to be successful.

Whitelaw said a study that was carried out in 2014 showed that only 16.6 percent of Basotho adults had access to credit and most of this credit was only in retail.

Whitelaw further indicated that working together the bottlenecks around access to finance can be addressed and help SMMEs contribute more to the economy of the country.

“Where I come from (Europe) a huge percentage of the economy is attributed to SMMEs and that can be the case here as well,” Whitelaw said.

He said accessibility, affordability and time saving are among the characteristics of a good secured transaction and collateral registry.

Chaba Mokuku, the Project Manager of PSC, said the secured transactions and collateral registry is a project that is aimed to be a response to several challenges.

“The first challenge is that the government has a very high wage bill, the government is the biggest employer and we have a very weak private sector. In normal circumstances, the private sector should be the one generating employment and stimulating the economy,” Mokuku said.

“Then we realised that the private sector is weak because of the unfavourable business environment, the overall investment climate is not favourable from starting a business to operating it. It’s a struggle,” he said.

“The unfavourable investment climate is due to unfavourable laws governing business and also access to credit.”

Mokuku specified that access to credit is not only a challenge for SMMEs but for individuals as well.

“A lot of businesses especially SMMEs and individuals do not have the collateral required by banks. Banks require land with a lease or a house for collateral both being immovable collateral and because of the nature of SMMEs and some individuals they do not own any of the above because they are still struggling to make ends meet,” Mokuku said.

He said it was due to the above mentioned challenges that they researched and learned that in other countries they use movable collateral as a means to get credit and it allowed even those who did not have immovable property access to credit, giving them a chance to partake in stimulating the economy.

“But for that system to work properly there has to be a mechanism in place to ensure that the system yields favourable results,” Mokuku said.

He said the secured transaction and collateral registry is designed in a way that lenders will be able to have a specific control of the property that is being used as collateral so that even if the borrower wants to use it as collateral to different lenders he/she cannot be successful as it will be in the system already.

“It is our hope that if this system works well it will promote financial inclusion as a lot of people will be borrowing money to invest in business and stimulating the economy,” Mokuku said.

The system has been used successfully in other countries like Liberia, Ghana, China and Seychelles.

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Short courses for ex-mineworkers



THE Lesotho Diamond Academy has introduced mining short courses, particularly to ex-mineworkers, to help them re-enter the mining sector.
The Essential Introductory Courses, which will run for two weeks, will start from June this year. The courses are meant particularly for people who worked in mines in South Africa.

The Academy’s CEO, Relebohile Molefe, unveiled the new courses during the graduation of 18 students last week, four of whom are now armed with Cutting and Polishing certificates while 14 graduated with Rough Diamond Evaluation certificates.

The new courses include the Essential Certificate in Diamond Grading and the Essential Certificate in Diamond Evaluation.

“The decision to offer these courses aligns with the Academy’s dedication to bridge the gap and ensure that individuals with valuable experience can seamlessly reintegrate into the diamond and jewelry industry,” Molefe said.

“By providing short courses, the academy does not only impart essential skills but also contributes to the sector’s growth by reactivating experienced individuals who had lost access to the industry due to no formal documents showing their experience in the industry,’’ she said.

During the graduation celebration, Molefe also unveiled a new sponsorship programme for various courses.

One outstanding student previously sponsored, who demonstrated exceptional proficiency in Rough Diamond Evaluation, was granted a fully funded bursary to further his studies into Advanced Certificate in Round Diamond Brilliantering.

In pursuit of its multifaceted objectives, one of which is to serve as a catalyst for employers in the diamond and jewelry sector to devise skills development strategies, the Academy is set to sponsor four additional students in the upcoming intake starting from February 15.

Two of these bursaries will afford a 30 percent discount on overall fees for two students progressing from Cutting and Polishing to advanced studies in Rough Diamond Evaluation.

Two will be fully funded bursaries to study for a Certificate in Diamond Cutting and Polishing.

Additionally, the institution will extend two fully funded bursaries to the public, fostering inclusivity and expanding opportunities.

The Academy says it plans to announce the search for two deserving Basotho individuals on its social media pages and website.

“Importantly, the bursary programme bears no age restrictions, reflecting a commitment to fairness and inclusiveness, ensuring that opportunities are accessible to all, irrespective of age,” it says in a statement.

The Academy says it seeks “to be a dynamic force in shaping the industry, not just within national borders, but also on regional and international platforms”.

“The emphasis on competitiveness within these markets underscores the institution’s commitment to producing graduates who are not only proficient but also globally competitive,” the statement reads.

“The recent graduation ceremony symbolises a milestone in the Academy’s journey. The success of its students is a testament to the quality of education and the foresight embedded in the curriculum.”

The Academy says its decision to sponsor further education for outstanding performers reflects a belief in nurturing talent and contributing to the continuous improvement of the diamond industry.

The Lesotho Diamond Academy was founded by the late Mpalipali Molefe, a prominent educator, diamond trader and an MP, who recognised the imperative to elevate professionalism in the diamond industry.

Staff Reporter

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Bank hands over uniforms to students



THE Lesotho Post Bank donated uniforms to students at Leqele High School worth a staggering M60 000 as part of its Back-To-School campaign.
The bank said it did this “to keep needy children in school and to promote their education”.

A teacher at the school, Tšepo Semethe, said the uniforms will likely motivate the students to work harder in their studies.

Semethe insisted on giving the bank the names of the students so that it could check their performance at the end of the year.

“At Leqele High School, we work very hard because what we want is excellence above all. To us, hard work pays,” he said.

The bank’s Chief Risk Officer, Molefi Khama, said they are getting old, they will soon retire and Lesotho Post Bank will be in the hands of these children.

He pleaded with the students to work harder.

“This is why we decided to come here to support the students in their education so that when coming to school, they should be confident,” Khama said.

“We are watching you and waiting on you,” he said.

The school’s head prefect, Tholoana Monatsi, said from now on, “no student will be identified by what they wear”.

“(Lesotho) Post Bank made us one and we thank them for that because what we wear cannot stand before our education. We indeed thank you and forever you will hold special places in our hearts,” she said.

A parent, ’Marorisang Latela, said they were very grateful for the gift from Lesotho Post Bank adding that they must also donate to other schools.

Minister of Trade, Mokethi Shelile, promised to go back to the school to discuss how the children could learn in comfortable surroundings.

Relebohile Tšepe


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Mamello School of Special Needs wins prize



MAMELLO School of Special Needs is the first-place winner of Standard Lesotho Bank’s Scaled-Up Pitching Den held at Maseru Avani on Tuesday.
The school has secured a grand prize for an all-expenses-paid trip to Kenya to participate as a finalist representing Lesotho at the Standard Bank Africa Awards.

The school, pioneered in 2020 during the early days of the Covid-19 pandemic through Zoom classes, deals with children who live with conditions such as autism, attachment disorders, Attention Deficit Hyperactivity Disorder (ADHD) dyslexia, Down syndrome and slow learners.

STKTM Solutions claimed the second-place spot, receiving a commendable M10 000, while Masia Farms secured third place and a M5 000 prize.

Pheello Masia of Masia Farms, thanked Standard Lesotho Bank for backing their vision and that of other Basotho entrepreneurs.

He acknowledged that the bank’s faith in their endeavours serves as a source of inspiration, propelling them to work harder and foster growth within the community.

The event, aimed at fortifying support and fostering regional integration for Basotho entrepreneurs across the African continent, showcased the bank’s commitment to driving the growth of Lesotho.

Malatola Phothane, Head of Enterprise Banking at Standard Lesotho Bank, set the tone in his welcoming remarks.

“As Standard Lesotho Bank, through business and commercial banking, we strive to turn possibilities into opportunities,” Phothane said.

“Lesotho is our home, and we drive her growth,” he said.

His words resonated with the bank’s dedication to nurturing local talent and fostering economic development.

Phothane acknowledged the eight finalists, commending them for their resilience and passion for their businesses.

He emphasised how each entrepreneur had stood their ground, displaying knowledge and unwavering commitment.

The recognition not only highlighted the achievements of the finalists but also underscored the bank’s role in recognising and uplifting the entrepreneurial spirit within the community.

Aliciah Motšoane, founder of Prestige Furnitures and Sentebale Gap Funeral Services, played a significant role at the event as a motivational speaker, sharing her entrepreneurial journey filled with challenges and triumphs.

She recounted her humble beginnings when she was selling bread in high school, leading to the establishment of Prestige Furnitures in 1998.

Despite facing a significant setback after her shop was burnt down during the riots and incurring a loss of M5 million, Motšoane never gave up.

She said business is always a demanding endeavour adding that it needs hard work and a unique mindset.

She urged entrepreneurs to embrace their roots, seek inspiration, and persevere through challenges.

The keynote speaker, the bank’s Head of Business and Commercial Clients, Keketso Makara, said the bank is committed to foster a thriving business environment, highlighting the pivotal role of youth collaboration across diverse economic sectors.

Makara said their mandate aims to empower youths in steering the private sector towards growth, contributing to economic diversification.

Makara urged the eight finalists to actively involve bankers in refining their proposals for maximum impact on economic stimulation and sustainable development.

The bank said the Scaled-Up Pitching Den not only served as a stage for entrepreneurs to present their ventures but also acted as a driving force for networking, collaboration, and collective empowerment.

Staff Reporter


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