Seabata Mahao
In a bid to deepen financial literacy, the governor of the Central Bank of Lesotho (CBL), Dr Maluke Letete, has implored the public to approach financial institutions to seek new and secure saving methods.
Letete highlighted this at the official launch of the 2024 Money Month campaign in Mohale’s Hoek where different stakeholders were engaged for a week.
“Savings are an important piece of financial literacy. There are new methods of saving with fewer challenges unlike the previous methods so please seek assistance from the financial sectors. These new savings methods include pensions, investments, and insurance,” he said.
He said lack of savings could lead to indebtedness, broken marriages, and suicide among other problems.
“One of the main challenges to savings is using money recklessly, as the CBL has noticed that most families have separated due to indebtedness. If we continue with indebtedness without saving, we are going to have a country with high rates of suicide, high divorce rates, and children becoming orphans. This has happened before but we have to stand out and prevent it from happening again,” Letete stated.
On borrowing, he urged Basotho to borrow money from only registered financial institutes. He emphasised that unregistered financial institutes often overcharge by up to 200 percent, and then be aggressive when their clients fail to pay.
“There are reported cases in our banks where people are heavily indebted. When these victims seek assistance from us the regulators, we cannot be of any assistance because we always tell people to use only registered financial institutions,” he added.
Moreover, Letete said every Mosotho needs to have the ability to understand and use various financial skills, including personal financial management, budgeting, and investing is an important aspect of life that individuals are advised to take note.
“The financial service provider should explain clearly all the terms and conditions written in the contract to show the full disclosure. Our local insurance should make their clients understand clearly about their products. We now have regulations to guide us on how to resolve the complaints,” Letete explained.
The new regulations which are meant to protect financial consumers include the Financial Consumer Protection Disclosure of Credit Information Regulations of 2023, the Financial Consumer Protection Marketing and Advertisement Regulations of 2024, the Financial Consumer Protection Information Disclosure on Insurance and Investments Products Regulations of 2024, and the Financial Consumer Protection Complaints Handling Regulation of 2024.
Meanwhile, Letete said there was a growing surge of youth who are scamming people off their money through various digital platforms. He cited the recent cyber-attack incident at the CBL where perpetrators wanted to hold CBL at ransom.
“These fraudulent scams can happen to any in this industry because they get hold of our systems. We need to be careful with our cybersecurity because we need to protect our information. Be careful of people pretending to be international investors without verification by relevant authorities,” said Letete.
