Turning movable assets into money

The Central Bank of Lesotho (CBL) in collaboration with the Competitiveness and Financial Inclusion (CAFI) Project, has launched financial literacy and LERIMA awareness campaigns aimed at improving access to finance for businesses and individuals across Lesotho.

The campaigns seek to educate Basotho, particularly micro, small and medium-sized enterprises (MSMEs) on financial management and the use of movable assets as collateral to secure loans.

CAFI’s Managing Director Chaba Mokuku said financial inclusion required more than the introduction of financial systems, stressing the importance of public awareness and education.

“We cannot achieve meaningful financial inclusion without raising awareness and ensuring that people and businesses understand the financial services available to them and how to access and use them effectively,” Mokuku said.

He said CAFI was supporting CBL through a nine-month outreach programme that would include district workshops for MSMEs, media outreach and an online portal providing practical financial education materials.

Mokuku explained that the initiative would help entrepreneurs improve their financial records, prepare for funding, manage money responsibly and make informed financial decisions.

He also called for greater use of the Lesotho Registry of Interests in Movable Assets (LERIMA), saying that although the system had begun helping businesses access finance, more MSMEs needed to take advantage of it.

Bafokeng Noosi, the Director of Other Financial Institutions Supervision at CBL explained that LERIMA enables individuals and businesses to use movable assets as collateral when applying for loans, particularly those without land or buildings.

The movable assets part provides an alternative for small businesses that may not have access to land, Noosi explained, highlighting the role of the registry in expanding access to credit.

He said the system also promotes transparency by allowing users to search for information about registered security interests before entering into financial transactions.

Noosi revealed that assets worth M3.7 billion had been registered on the platform, comprising approximately 4,481 registered security interests or filings.

“We are here today to come and talk about how do we double or triple this amount in a very short space of time, given its potential,” he said.

Despite the progress, Noosi said greater engagement with financial institutions and productive sectors was needed to increase the use of LERIMA, particularly among businesses in sectors such as agriculture.

He added that public awareness, financial education and continuous engagement had been identified as key areas requiring attention to improve uptake of the system.

The benefits of LERIMA were also highlighted by representatives of the microfinance sector and entrepreneurs who shared their experiences of accessing finance through the platform.

Speaking on behalf of the microfinance sector, ‘Mamakhaola Letsie said her institution had experienced growth in lending and an expansion of its credit portfolio after receiving training on the system.

Entrepreneur ‘Makatleho Sehapi said she used her truck as collateral to obtain financing for her business ventures, while ‘Malintle Seliane said funding secured through LERIMA enabled her to purchase a business vehicle and strengthen her operations.

In his closing remarks, CBL’s Governor Dr Emmanuel Maluke called for stronger cooperation among government, the private sector and development partners to improve access to finance and support economic development.

He said the financial sector had capital available to support businesses with viable and innovative ideas, adding that such investment could stimulate economic activity and create opportunities for Basotho.

Refiloe Molise

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