. . . as Central Bank Governor expresses concern over abuse of loans by borrowers
The Central Bank of Lesotho Governor, Retšelisitsoe Matlanyane, has expressed concern at the rampant abuse of loans which would have been obtained from financial institutions for business purposes.
Dr Matlanyane made the observation at Monday’s launch of the Code of Banking Practice — a document produced by the Bankers Association of Lesotho whose members are Nedbank Lesotho, First National Bank Lesotho, Standard Lesotho Bank and the Lesotho Post Bank.
According to the governor, more people are taking loans to finance their social lifestyles and not for investment purposes.
“The number of individuals borrowing money from the banks has increased, but people are taking the loans to buy cars or make a feast, and not to invest, which is very disturbing,” Dr Matlanyane said.
The Code of Banking Practice, she further said, would help open lines of communication between banks and their clients “so that people can learn better ways of spending their monies”.
Dr Matlanyane also noted the objectives of the code were noble and, if well-implemented, could also serve as a platform to regulate the banking industry.
“Every now and then, we get a handful of complaints from clients about their bankers,” Dr Matlanyane said.
“With this code, the clients now know their rights and know that they can take the banks to task when they do not get good services.”
The Bankers Association of Lesotho chairperson, Mpho Vumbukani, who is also the Chief Executive Officer of Standard Lesotho Bank, said the code seeks to define relations between banks and their clients.
Mr Vumbukani further said the code was established to foster good relations founded on fairness, transparency, accountability and reliability, between the banks and current or potential customers.
“We have articulated what we commit to as bankers in terms of services and products we offer to our clients.
“We engaged with our sister associations when making the code and have been able to identify services and products that are relevant to our clients,” Mr Vumbukani said at Monday’s launch.
He further highlighted the objective of the code is to “set standards of good banking practice and service for purposes of building good relations”.
The other objectives of the code, Mr Vumbukani said, are to set parameters regarding customer care, to promote disclosure of clients’ financial history, promote fair and open relationships, foster confidence in banking systems and to require banks to have procedures for dispute-resolution.
“Banks have been criticised fairly and unfairly and we have remained good listeners,” he said.
“We have a role to play in dispute-resolution and we should be the first point of call for queries and complaints,” he said.