Improve regulatory environment: Matete
INSURANCE giants Metropolitan last year celebrated its golden jubilee. The country has been involved in various corporate social initiatives (CSI) in health, education and sports. The company’s Chief Executive Officer Nkau Matete (NM) spoke to the Lesotho Times editor, Herbert Moyo (HM) about the organisation’s journey and the various projects that they have been involved in. Below are excerpts from the interview.
HM: Tell us about your background. Who is Nkau Matete?
NM: I am a local boy; born and bred in Lesotho. I hail from the district of Mafeteng in a village called Mathebe. I grew up there and like every Mosotho child I used to herd cattle. I started working here about 10 years ago coming from the accounting background. I am a people’s person. I enjoy living and making change, influencing change and just seeing people grow. But getting deeper into the background and the story of how we want to influence the society is that, I get pleasure or satisfaction from making a difference. So, through my company, we also look at the community around which we live and say what are the challenges, what are the things that we can boost in different categories. So, you can see that we are in sports, we are in education, of course most of the time we are biased toward the clientele, the major stakeholders.
For instance, teachers as a market, they are very supportive of our insurance company. We tend to be very biased in terms of how we make changes in that area. For example, now we are building tennis courts. We did one for Lesotho High School a couple of years ago. Now we are about to start another one at Thetsane High School. This is one contribution to the community. But because schools will have the custodianship, it has a chance to stay longer and be looked after unlike if it doesn’t belong to anybody. So, while we are supporting the teachers but every time we go and invest at school, we say remember the community around the school. It can’t be yours only. It has to be shared by the community.
HM: Are you involved in any projects at any rural schools?
NM: 100 percent. In 2015 we built three classrooms at a rural school in the Mafeteng district. I have fond memories of that because there is no better feeling than seeing the joy of children who used to learn outside in the rains and the biting winter of Lesotho. It’s a pity that this happened during election time so we did not get adequate coverage. I remember another school in Leribe which did not have ablution facilities and people had to use the donga. We built toilets for boys, girls and the other one for the staff. This may seem so basic but for people who were living without that facility it meant a lot for them. So, we really do look outside Maseru.
We also recently funded the purchase of a dialysis machine for the Maseru Private Hospital. It is also something that we are passionate about for two reasons. One, we had one of our employees who had kidney failure in 2012. He needed dialysis. He was one of our top performing sales consultants and this is a job you really cannot sit in the office but have to be out there. So, when it happened, we were obviously touched and wanted to see how we could assist. Every week he had to go to Bloemfontein because there were no dialysis facilities in Lesotho. That was when we first became aware that there was this challenge is in the country.
We engaged the Ministry of Health during Dr Monyamane’s tenure. A lot of discussions happened and we recently launched the facility. So, there is now a facility. In fact, in the interim I am told government also has one in Leribe and there is another private person who has one there. But now at least there is one that we have funded and is working. We feel that it will not only assist people by reducing their traveling time but it will also bring back their dignity.
Another reason is that we have a health arm in the business or medical aid as people put it. We incur serious claims specifically for cancer — oncology and dialysis. This money goes outside the country. So, we said with all these claims flowing out, if we had a facility inside, that would help the country have the money circulating within. There was also a business consideration in that. When you think about the rural people, they do not deal with medical aid so we could do it as a pure donation but with a business sense because people would pay to use the facility.
But the challenge about the government facilities is that, it is known that government doesn’t think businesswise so the ownership, the responsibility to ensure that the facility functions all the time is not there with government facilities and centres. We believe this one will stand a better chance in terms of sustainability because it is not a free service. With government it would be a free service.
HM: What is the value to the dialysis machine and maybe further to that, we have seen that government has a challenge in terms of personnel and also equipment which is an area where you have assisted. Are there any plans also to assist the government hospitals further as well?
NM: The whole project cost M1, 6 million. We were careful to get technical assistance. The person supplying the equipment included the support and training of the technician. So, there is one or two who went to Welkom to learn how to operate those machines. We didn’t just provide the machinery but the whole technical support was part of that so the M1, 6 million include the whole package to ensure the facility is functional.
HM: Please take us through Metropolitan’s 51-year journey and what have been the major mile stones. The organisation is almost as old as the country in terms of independence, what would you stand and say, we are proud of these particular achievements?
NM: We look at our corporate social investment as making a difference in the community. We look at different aspects of the community. We just talked about the dialysis machine. That’s our environment. That’s where we are. That’s what we see around. We have built schools, we have taken children to school. Another programme that we do not boast about is the contribution that we make in terms of rare skills; sponsoring students who do actuarial sciences for instance, students who are trying to become doctors. There we are also biased to excellence because we are not a donor agency and when we try to encourage excellence and hard work, we will choose in the top five students in the country at Form 5. Currently we have a student who is studying in the United States. When he graduated from high school, he was the top most student. We said we will bankroll this student to any place he wanted to go to. So, he started in South Africa, he went to Swaziland.
There is a group called the Women Senior Citizens. They approached us a while ago and they were looking for transport because they were using a 20-year-old minibus. We gave them a new minibus and they were every thankful. We are not biased toward any group. I am talking about education. It is children. I talked about health and senior citizens. They are imparting knowledge to young people.
Another big project is that of the National University of Lesotho (NUL) which recently launched the Innovation Hub a project into which we pumped M1 million because they have brilliant projects. We gave them the money and told them to go and decide which of the projects can help the university. One of the challenges faced by the NUL is the subvention which they get from the government which they say instead of going up, in the last 10 years it has actually gone down. We said they must stop mourning and turn one or two projects into a business through which they can generate their own revenue.
They have a biscuits bakery and are already into yoghurt production. Now they are also producing tiles and a certain decorative stone made from local material. It is impressive. They said they wanted to develop one of the projects and sell it but they also noted that it was slow because they are selling a product which no one has really bought into. Now what they are doing is that the same students who are working on that research end up becoming shareholders in that business because they have grown with it. They have conceptualised it and there is nothing you can compare with that attachment.
HM: What are some of the major challenges that you have faced in this journey?
NM: Challenges are many but with time you learn to live around them. Our biggest challenge is, as you know Lesotho is completely surrounded by South Africa. So, one of the challenges that we have is the cross-border competition. We have companies that are not physically present in Lesotho but compete with us. It is just easy for them to have access to this market without having to coming here.
We try to fight it with through engaging government and authorities. The regulator in this business is the Central Bank of Lesotho. We will raise it up and say, please protect this small market. Come to think about it. Our parent company, the major shareholder is from South Africa. If they end up getting the idea that you do not have to go to Lesotho, you can run a company from here. Who will create jobs in this country?
Another thing that has been very slow coming is the regulatory environment. We run a very sophisticated and specific industry. Unless the regulation is fast paced to keep up with the challenges, it becomes problematic to innovate and work around certain issues. For example, one of the businesses we run is promotion of pensions.
There is no primary legislation in this country for pensions. You will have tax laws talking about pensions. There is no law for pensions. But it is a business that we have been doing for over 30 years now. Luckily as we speak there is a bill before parliament that tries to address that. You need constant engagement with authorities to say please come up with rules and regulations because it makes everybody’s life easy when they know the environment they deal with.
HM: I understand that the Minister of Finance recently presented a bill to parliament. Did you have a chance to make input?
NM: Yes, we had a chance. They will have what they call stakeholders consultations and Metropolitan, being one of the leading insurers, we will have a bigger input but also in terms of expertise. It is something we have been doing for long.
HM: What specifically would you want to see in terms of that legislation when it is finally enacted?
NM: Economies are supported by the population’s savings. So, if you take pension as one source of biggest saving and you don’t have those being regulated in such a way that they support the development of local economy, its already one thing that takes us back so much. So, once you have this regulation, we expect that saving will now be managed or regulated. We cannot collect them here and go and build towers in Cape Town or London. The regulations will force you to have some element of it developing the economy. In the absence of that you can have your savings building cities elsewhere but not here.
HM: Time and again we have witnessed a situation in the country where there is this mushrooming of pyramid schemes or Ponzi schemes. How have these affected your sector?
NM: That is another challenge not only to our industry but has actually affected the entire economy. Every 10 years there will be one but people do not learn. There will still be others who are tempted to go in. And unfortunately, with Ponzi schemes the story is that those who get in early will make money but you just do not know when that early is. What is certain is that they are going to fall. The recent one is MMM. Those things, they destroyed a lot of value. It curtails your ability to grow because suddenly the funds are going elsewhere. You wait for the bubble to burst before the funds are channelled into proper vehicles.
HM: Seeing that you are a stakeholder here, is there any part that you are playing in terms of awareness as far as pyramid schemes are concerned because since it is cyclical as you are saying?
NM: Yes. The Central Bank took a leading role because there has been criticism that they are reactive than being proactive. But now there are those joint programmes over the radio. We have something that we now do annually that used to be called money week but is now money month where we go around the country telling people what is there, what is available in financial services.
There will be us, the banks, micro lenders, everybody who is regulated by the Central Bank of Lesotho. Last year they were in Mokhotlong and this year they were in Thaba-Tseka. It started in Maseru about five years ago but we have now taken it out there so that there is general literacy around use of money. The slogan we used this year was, ‘Money matters matter’. We do participate in those financial education programmes.
HM: A few new players have now entered the scene, how has been the competition?
NM: A few years back we were dominant and there was really no competition but recently there has been growth in competition in terms of just local players upping their game and also new players like Liberty. There is interest. However, competition only helps you to up your game. It is not bad because people tend to sit on their laurels or become complicit when they are not facing any competition.
HM: Any new products in the pipeline?
NM: We recently launched a new investment vehicle called Outcome Base Investment (OBI). It is our way of giving our clients access to different portfolios. In the past we only had four and they would choose to have certain percentages among the portfolios. The vehicles were few. We are now opening up for them to have access to other asserts managers who are not necessarily in our stable but are using us to get there. So, it is very exciting this OBI we are launching tonight.
HM: You decided that this would the final year in terms of your sponsorship of the Independence Cup. What has been the rationale behind pulling out?
NM: We are also not happy that we are leaving but we are not leaving sport or soccer per say. We are leaving the Independence Cup. We have been there for about seven years. We just decided to pull out and consolidate our presence. What we are trying to do is to go out and find where we can have maximum participation. We sponsor two development teams for the Lesotho Football Association (LeFA); under-20 and 17 we are the main sponsors. We prefer development more than the Premier League because even our business is building for our future. But the Independence Cup was a joint venture between ourselves and Standard Lesotho Bank.
What we wanted to do is to also consider our brand. You can imagine that when you are doing a joint project, there are certain things that will not meet your corporate standards. The two reasons are around brand positioning and pulling back, consider everything we are doing in sports and pooling resources into one where we will have maximum impact.
HM: But the premier league teams are safe?
NM: They are safe. We are still involved with four teams; LDF, the LMPS, the university team. What we did last year is that we bought all the equipment for all the teams in the Premier League who do not have sponsors so that we can level the standards.
HM: Is there any chance that you could review upwards the sponsorship for the premier league teams?
NM: We do. Every year we sit and evaluate the benefits we got because we give them milestones and deliverables. We started a funeral scheme for Bantu. So, we sit down and say, what did you do?
HM: The country has kickstarted the processes toward the implementation of the multisectoral reforms. We do not hear so much talk about reforming the economic side of things. Are you happy with the way they are structured? Is there any you would want to see as part of the reforms from an economical point of view?
NM: We are hopeful about the reforms that they will lead to stability which is all we want as citizens and as the business because we need stability for investment. We were invited very late for our participation and we did not have enough by way of consolidating our views. At the moment I have my hand up. But we are hopeful that with further engagement we will have our chance.