MASERU — The Central Bank of Lesotho (CBL) says it plans to introduce an automated clearing house system that will significantly reduce the time taken for interbank payments.
A senior official with the CBL, Thenjiwe Namane, said the new payment system will improve economic growth and encourage more investment in the country.
Namane was addressing a business workshop organised by the Millennium Challenge Account (MCA) on interventions it is planning to introduce to improve the business climate in Lesotho.
“The introduction of an automated clearing house system will reduce the risk of handling cash in banks and it will improve the confidence in banks among the general public,” Namane said.
She said the automated clearing system will assist the central bank to focus on its monetary policy operations and increase Lesotho’s competitiveness to international investors.
The system will handle interbank payments or other payments below M100 000.
It is expected to significantly reduce the time that is taken in making interbank account payments.
The system will be utilised by banks and large retailers.
About 80 percent of payments of the payments are between the government and businesses.
The central bank is currently using the money wire system for any amounts greater than M100 000.
The system was introduced in 2006.
However, the new system will depend on the introduction of a new ID system that the Ministry of Home Affairs wants to roll out.
It is still not clear when the government plans to introduce the new ID system.
“We will introduce this system once the national ID system is in place,” Namane said.
“It will reduce the cost of transactions for businesses and the banking community.”
The need to first introduce the new ID system could however hold back plans to roll out the new payment system.
A senior officer at the Ministry of Home Affairs, Neo Ntho, said work on the ID system had still not begun.
“There will be a national registration process which will be the first step before we could start giving out IDs to nationals and permanent citizens,” she said.
Tšooana `Mokose, an official from the central bank, said the absence of a credit bureau made most banks reluctant to give out loans to businesses operating in Lesotho.
“A credit bureau will allow banks and larger money lenders to access information on their clients which will assist them to make informed decisions when giving out loans,” `Mokose said.
“(This will be possible) as there will be a database on the credit status for anyone.”
She said the setting up of a credit bureau will make it easier for businesses or individuals with a good credit record to access loans even when they might not have any collateral.
“The credit bureau will be utilised by banks, money lenders, retailers and service providers, which will help assess whether their clients will afford loans,” `Mokose said.
`Mamahapela Mokuoane, Lesotho Post Bank (LPB) marketing manager, said they had received some funds from the MCA to introduce electronic banking services in their banking halls.
She said the bank will introduce the smart card system in December and will instal about 100 cash points all over the country.
“The smart card will be used at any of the points to do various transactions which will cut out the necessity of carrying cash to do payments,” Mokuoane said.
She said the second phase of the project will see LPB interlinking with other banks electronically.