‘Mo­bile money bridges bank­ing gap’

Lesotho Times - - Business - Bereng Mpaki

THE Cen­tral Bank of Le­sotho (CBL) says mo­bile money is chang­ing the way bank­ing is done in the coun­try, although there was still a long way to go be­fore fi­nan­cial in­clu­sion is a re­al­ity.

On Mon­day, the CBL led lo­cal fi­nan­cial in­sti­tu­tions and mo­bile money op­er­a­tors in launch­ing a cam­paign aimed at driv­ing up the us­age and up­take of the ser­vice for the un­banked pop­u­la­tion as a safe and con­ve­nient plat­form.

Among the ac­tiv­i­ties planned for the cam­paign, which runs from 9 to 13 May 2016, are ra­dio and tele­vi­sion shows as well as road­shows in Leribe, Mafeteng and Maseru.

Mo­bile money is a fi­nan­cial trans­ac­tion ser­vice where money is trans­ferred elec­tron­i­cally us­ing a mo­bile phone without the need of a bank ac­count.

Its func­tions in­clude bal­ance check­ing, funds trans­fer, de­posit­ing and with­draw­ing of cash, sav­ings, bill pay­ments, air­time pur­chase and long-dis­tance re­mit­tance of funds. Mo­bile money plat­forms first en­tered the Le­sotho fi­nan­cial sec­tor in 2012 when Econet Tele­com Le­sotho in­tro­duced Eco­cash, with Vo­da­com Le­sotho launch­ing M-pesa the fol­low­ing year.

Speak­ing dur­ing the launch, CBL Act­ing Gover­nor, Dr Masilo Makhetha, said in­ter­est in the ser­vice had been re­mark­able to date.

He said the two tele­coms com­pa­nies had col­lec­tively seen a to­tal of M67 948 397 cir­cu­lat­ing through their net­works since De­cem­ber 2015.

“As a de­vel­op­ing coun­try, Le­sotho has kept abreast with this new re­gional, con­ti­nen­tal and global de­vel­op­ment of em­brac­ing mod­ern tech­nol­ogy through the use of mo­bile money,” Dr Makhetha said.

He said mo­bile money in Le­sotho was cur­rently be­ing used by many or­gan­i­sa­tions in­clud­ing banks, mo­bile net­work op­er­a­tors, in­sur­ances, pub­lic and pri­vate in­sti­tu­tions; as well as mem­bers of the pub­lic for a range of ser­vices.

“As of De­cem­ber 2015, mo­bile money has man­aged to trans­act a to­tal of M751 743 for air­time pur­chases, M243 169 for cus­tomer cash with­drawals, M321 768 for bill pay­ments and M221 257 for do­mes­tic money trans­fers,” the act­ing gover­nor said.

He said sig­nif­i­cant mo­bile money mile­stones in Le­sotho in­cluded be­ing used for pay­ing in­surance pre­mi­ums, as a sav­ing tool for peo­ple without bank ac­counts and also for cross bor­der re­mit­tances.

Dr Makhetha, how­ever, noted that there were a num­ber of chal­lenges the plat­form was ex­pe­ri­enc­ing in its growth.

Some of these, he said, in­clude low lev­els of fi­nan­cial lit­er­acy which slow down the up­take in ru­ral ar­eas, and poor liq­uid­ity man­age­ment by some agents, which leads to them run­ning out of cash for with­drawals.

Dr Makhetha also said mo­bile money agents were still con­cen­trated in ur­ban ar­eas to the detri­ment of re­mote com­mu­ni­ties. He said there was also low up­take for salary pay­ments us­ing mo­bile money and lack of full in­ter-op­er­abil­ity be­tween mo­bile money op­er­a­tors as well as be­tween mo­bile money op­er­a­tors and banks.

“In or­der to ad­dress these lim­i­ta­tions, we need to strive to re­duce the amount of time peo­ple spend wait­ing in queues and trav­el­ing to pay their bills in cash,” he said.

“Air­time top-ups, bill pay­ments and even mer­chant pay­ments are not enough. Most im­por­tantly, we have to in­crease col­lab­o­ra­tion be­tween banks, mo­bile op­er­a­tors, re­tail­ers and in­de­pen­dent com­pa­nies.

“In this con­text, pay­ment and bank­ing must be avail­able ev­ery­where for peo­ple to trust it. That is a huge chal­lenge, from both a tech­ni­cal and busi­ness per­spec­tive.”

The act­ing gover­nor added that there was a need for more im­prove­ments to be made on the le­gal and reg­u­la­tory frame­work.

“On a sim­i­lar vein, we have to strengthen the le­gal and reg­u­la­tory frame­work. To this ex­tend, e-money reg­u­la­tions have been drafted,” he said.

“There is also need to pro­mote mo­bile money lit­er­acy among low in­come peo­ple and agents. CBL should also con­tinue to sup­port ap­pro­pri­ate mar­ket and prod­uct de­vel­op­ment for the low in­come and un­der-banked pop­u­la­tion.”

CBL Act­ing Gover­nor Dr Masilo Makhetha.

Newspapers in English

Newspapers from Lesotho

© PressReader. All rights reserved.