Africa-Press – Lesotho. The Governor of the Central Bank of Lesotho, Dr Maluke Letete, on Monday hailed the launch of the Financial Consumer Protection Act as a huge milestone for Lesotho.
He said the new law will seek to protect consumers in Lesotho adding that indebtedness is on the rise despite all efforts to stop it. “The situation in this country is a bit disheartening,” Dr Letete said.
Money lenders had even resorted to taking their customers’ identity documents, he said. “I hope with this law we are launching today, all these issues shall be a thing of the past,” he said.
“The law is the law but without it being implemented we cannot get anywhere.
“We are now looking for commitment and ability from the people of Lesotho to truly implement that law,” he said.
Dr Letete said it is their responsibility as the bank to see the results so that in the next five years, they can really see that they have set free the number of Basotho that were indebted and those who lost their identity documents to the money lenders.
Under the new Act, financial providers are expected to provide information to consumers in a clear, fair and legible manner before they are bound by any agreement.
The financial provider is also expected to provide a key fact statement that summarises the key terms and conditions of a product that will allow for easier comprehension by consumers and comparison across all different service providers.
The financial provider is further expected to inform the consumer applying for credit that checks will be made at, information collected and provided, to a credit reporting system. The financial providers are also prohibited to retain or possess ATM cards, passports or identity documents of a consumer for collateral purpose.
The United Nations Development Programme (UNDP) Resident Coordinator, Amanda Mukwashi, said the Act comes at a time when Lesotho is facing numbers of financial challenges triggered by Covid-19 and the war between Russia and Ukraine, amongst others.
“Lesotho is already facing a number of shocks which include poverty, inequality and low job creation in the private sector,” Mukwashi said.
“This calls for youths to create jobs for themselves,” she said. She said financial inclusion “becomes a pillar to help Basotho create jobs”.
She said young people need to be equipped with the necessary resources to turn around this tragedy. “All these are going to require very clear protection of the consumer,” she said.
Mukwashi said we should consider protecting them from high competition which drives them out of the market. She said if they do not have access to the market, they are not going to be able to achieve the intent of the Financial Consumer Protection Act.
The president of the Insurers Association of Lesotho, Mpho Vumbukani, said the objective of this Act is to create a fair play for their clients. He said as financial service providers they exist to serve the clients and it is important that this gets done.
Vumbukani said they are aware that as financial service providers, especially in the insurance sector, some of their services might be quite complex and the issues of transparency, financial literacy and education are very critical.
“We believe that through this Act, they will shape a better future for our nation,” he said.
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