STANDARD Lesotho Bank (SLB) says it is not responsible for the decision to switch from an automated payment system to a manual system that it is currently using to pay wool and mohair farmers.
The change to the manual system is believed to have a played a significant role in causing the congestion of farmers at SLB’s branch in Mokhotlong.
The branch has been swamped by farmers over the past two weeks as the Lesotho Wool Centre (LWC) is expediting payment of farmers.
SLB is one of the banks that the LWC uses to dispense payments to wool and mohair farmers.
The bank, which has been involved in facilitating payments for wool and mohair farmers for many years, launched a response following circulation of videos of hundreds of farmers gathered outside its Mokhotlong branch.
Addressing journalists in Maseru this week, SLB chief executive officer, Mpho Vumbukani said they changed the payment method at the request of their client.
He said the bank is concerned about the challenges that are faced by the farmers to access their funds as this is not the bank’s own doing.
He said previous brokers such as South African company BKB, were using the automated payment system to pay farmers.
“We have noted and acknowledge that the bank is currently receiving unusually large volumes of wool and mohair farmers whom we are serving, for instance in Mokhotlong district, and we also expect the same influx at other branches in the weeks to follow,” Mr Vumbukani said.
“So far, the bank has beefed up the capacity to expedite payments to farmers.
“These payments are being processed manually as demanded by the farmers as opposed to the usual online, faster payment transfers.
“We have also engaged with our clients, the payment broker Maseru Dawning and the Lesotho Wool and Mohair Growers Association to agree on an effective and mutually accepted long-term solution to this challenge.
“One such alternative is the automated payment process that we currently have for all our corporate and business clients including Maseru Dawning, that is capable of making up to 10 000 payment at a time.
“This Business Online system is the same one that we are using to pay factory workers monthly.
“We continue to engage with all our stakeholders. Due to the confidentiality policies around our clients’ accounts and our clients’ business, we are unable to delve into more specific details around their accounts.
“We urge all the farmers who are affected by this challenge to support us as we continue to do everything possible to ensure that we transfer all the monies due to them as and when instructed by Maseru Dawning.”
Meanwhile, in an interview with the Lesotho Times, LWC spokesperson, Manama Letsie, said they resorted to the manual payment system due to the numerous challenges that the wool centre encountered when trying to pay farmers through the bank accounts they provided.
“This is not a decision that applies to only Mokhotlong farmers but across the entire country.
“The decision came about after we encountered challenges with the bank account numbers that were given to us by the farmers, which we could not understand why.
“So, in the end we instructed the bank to pay farmers in manual system,” Mr Manama said.
In an earlier interview, the LWC marketing officer, Tekane Thibeli, said many of the bank accounts that they received from the farmers were found to be dormant, and therefore payments could not go through.
LWC is a joint venture between wool and mohair farmers and Maseru Dawning (a China investment company, with a vast experience in wool industry) with Basotho Owning 75 percent of the venture.
The recent payments come after protracted delays in the payment for the fabric auctioned locally for the first time through the LWC.
For more than 40 years up to last year, Basotho farmers sold their wool and mohair from South Africa through Port Elizabeth-based brokers, BKB.
But on 4 May 2018, the Agriculture Minister, Mahala Molapo, torched a storm when he gazetted the Agricultural Marketing (Wool and Mohair Licensing) Regulations of 2018.
The Minister of Small Businesses, Cooperatives and Marketing, Chalane Phori made further amendments on 30 August to include associations and cooperatives among those who were barred from trading in wool and mohair without a licence from his ministry.
The regulations further state that “the holder of an export licence shall not export wool and mohair unless it is prepared, brokered, traded and auctioned in Lesotho”.
Any person found guilty of brokering, testing, processing, trading and auctioning wool and mohair without a licence would be liable to a fine of M50 000 or a maximum of five years imprisonment.
Anyone found to be in the business of shearing wool and mohair or exporting without a licence will be fined M20 000 or be imprisoned for two years.
Wool and mohair is currently auctioned locally by the LWC.
The 2018 regulations sparked strong protests from the wool and mohair farmers and this led to LNWMGA filing a High Court application in September 2018 seeking the nullification of the regulations on the grounds that they violated the farmers’ rights to sell their product to whoever they wished and from wherever they chose.
Meanwhile, the farmers have been up in arms with the LWC after enduring a dry festive period having failing to receive payments for selling their fabric locally.
This week, while some farmers reported an improvement in the proceeds from fabric sales compared to what they used to get in the past while working with BKB, others said they have received lower than they projected.