Moroke Sekoboto
THE Central Bank of Lesotho (CBL), in partnership with the Alliance for Financial Inclusion (AFI), has launched an Inclusive Green Finance Capacity Building and Planning Workshop aimed at strengthening the country’s financial sector against the growing threats posed by climate change.
The workshop, held at Lehakoe Recreational and Cultural Centre this week, seeks to equip stakeholders with the knowledge and tools needed to integrate climate considerations into financial sector policies and operations.
Speaking at the launch, CBL First Deputy Governor, Lehlomela Mohapi, warned that the increasing frequency of floods, rising temperatures and land degradation posed a serious threat to Lesotho’s economic stability.
He said climate-related disasters were undermining food security, reducing agricultural productivity and damaging critical infrastructure, making it imperative for financial institutions to adapt to emerging environmental risks.
“As climate change deepens poverty, financial inclusion plays a critical role in building resilience for individuals, especially in response to both sudden climate events and the gradual impacts of changing rainfall patterns and other climate shifts,” Mr Mohapi said.
He noted that financial services such as savings, credit, insurance, money transfers and digital finance solutions could help communities better cope with climate-related shocks.
“Financial inclusion is key to expanding access to green technologies that help mitigate climate change,” he said.
Mr Mohapi said the workshop was intended to build the capacity of stakeholders, harmonise terminology and lay the groundwork for the development of a national Inclusive Green Finance roadmap.
He added that the initiative would contribute to the formulation of regulatory guidance for banks, insurance companies, pension funds, securities firms and other non-bank financial institutions to help them integrate climate risks into their operations.
“The long-term goal is to build a resilient financial system and support the development of financial market frameworks and instruments that advance the green economy,” he said.
CBL Head of Insurance Supervision, Francis Makaka Mothibe, said the country needed to move beyond awareness campaigns and focus on practical measures that improve financial inclusion.
He observed that low-income households were often the hardest hit by climate-related disasters, making financial inclusion a crucial tool for protecting vulnerable communities.
Mr Mothibe cited findings from FinScope surveys, which show significant progress in Lesotho’s financial inclusion efforts. The proportion of banked adults increased from 22 percent in 2011 to 48 percent in 2021, while financial exclusion declined from 19 percent to nine percent over the same period. Overall financial inclusion reached 89 percent.
He challenged regulators and financial institutions to translate these gains into practical climate adaptation measures.
“People at the lower end of the economic spectrum are often the most affected by climate-related disasters, making financial inclusion essential for protecting vulnerable communities,” Mr Mothibe said.
“The workshop should focus on translating discussions into practical action. Regulators and financial institutions need clear policies and stronger coordination to address environmental challenges effectively.”
AFI Head of Africa Regional Office, Nomcebo Hadebe, commended Lesotho’s progress in expanding access to financial services and stressed the importance of collaboration in achieving climate resilience.
She said inclusive green finance was designed to ensure that financial services reached vulnerable groups, including farmers, women, young people and rural communities.
“Achieving inclusive green finance requires collaboration among various stakeholders,” Ms Hadebe said.
She noted that while the CBL provides critical regulatory leadership, the transition to a greener and more resilient economy would require active participation from government institutions, financial service providers, development partners and communities.
AFI and its partners, including climate finance experts from Germany, have pledged continued technical support to help Lesotho develop practical policies and frameworks that promote sustainable finance while protecting vulnerable communities from the effects of climate change.
The support is expected to assist the CBL in translating the workshop’s outcomes into concrete measures that strengthen climate resilience, safeguard livelihoods and promote sustainable economic development.
