The Central Bank of Lesotho (CBL) is finalising drafting of the market conduct supervision framework, in a bid to strengthen financial customer protection to promote transparency, fairness and responsible conduct across the country’s financial sector.
Addressing a recent market conduct supervision workshop for Micro, Small and Medium Enterprises (MSMEs) at the Lehakoe Recreation and Cultural Centre, Executive Assistant to the Governor, Dr Rethabile Masenyetse, said the framework would provide clearer rules and expectations for financial institutions.
Emphasising the importance of ethical and professional conduct by financial institutions, she said: “Consumer protection requires financial institutions to act honestly and fairly at all times, particularly when dealing with vulnerable customers.”
The CBL also plans to strengthen its internal capacity to improve the way they handle and resolve financial complaints from stakeholders.
“We will be capacitating CBL Financial Consumer Protection staff in advanced complaints data analysis to better monitor sector trends and resolve disputes,” DrMasenyetse said.
She further explained that specialised training is also being extended to senior management within the financial sector, consumer advocacy groups and MSMEs to ensure a shared understanding of rights, obligations and supervisory expectations.
DrMasenyetse said financial service providers are required to practice responsible lending and avoid over-extending consumers, in line with the Financial Consumer Protection Act of 2022. She added that institutions must also safeguard the safety and confidentiality of customer information.
“The financial sector evolves, so must its oversight. The new Market Conduct Supervision framework will help the Financial Consumer Protection Division monitor a wide range of players, including banks, insurance companies, microfinance institutions and money transfer services,” she said.
On his part, the CBL’s Head of the Financial Consumer Protection Division, Advocate NthatiMokitimi, said enhancing the bank’s ability to analyse consumer complaints would support a more preventive and proactive supervisory approach.
“This proactive stance is critical for maintaining public trust and ensuring that financial sector growth does not come at the expense of consumer safety,” Mokitimi said.
She explained that financial customer protection provides a legal safety net by establishing fundamental consumer rights, including the right to safety, protection against hazardous goods, and the right to be informed with accurate details on quality, price and other key terms.
Mokitimi added that the Act empowers consumers to seek speedy and affordable remedies for grievances through specialised consumer courts or tribunals, often without the need for costly legal representation.
“It also acts as a shield against unfair trade practices, including misleading advertisements, defective products and predatory pricing. Specific provisions safeguard those who may be easily exploited, such as the elderly, children and persons with disabilities,” she said.
Moses Musantu, the World Bank’s Senior Financial Sector Specialist said robust financial consumer protection frameworks are essential for fair treatment, informed decision-making and effective dispute resolution.
“Consumer trust and confidence are essential for the proper functioning of the financial system. Consumers should be knowledgeable, safe and secure in their dealings with financial service providers and their intermediaries,” Musantu said.
He added that integrating financial consumer protection policies into regulatory and supervisory frameworks strengthens financial stability, addresses information imbalances and ensures that consumers are protected from harm as the sector continues to grow.
Summary
- The Central Bank of Lesotho (CBL) is finalising drafting of the market conduct supervision framework, in a bid to strengthen financial customer protection to promote transparency, fairness and responsible conduct across the country’s financial sector.
- Addressing a recent market conduct supervision workshop for Micro, Small and Medium Enterprises (MSMEs) at the Lehakoe Recreation and Cultural Centre, Executive Assistant to the Governor, Dr Rethabile Masenyetse, said the framework would provide clearer rules and expectations for financial institutions.
- She explained that financial customer protection provides a legal safety net by establishing fundamental consumer rights, including the right to safety, protection against hazardous goods, and the right to be informed with accurate details on quality, price and other key terms.
Seabata Mahao is a general news reporter with special focus on Business and Sports. Started working at Newsday in 2021. Working in a team with a shared goal is what I enjoy most and that gives me the motivation to work under any environment leading to growth.
