MASERU — Lesotho Post Bank chief executive officer Mpho Vumbukani says the bank is in the process of expanding its presence in the informal sector which had largely remained unbanked.
In an interview with the Lesotho Times last Friday, Vumbukani said the bank was targeting the informal sector because it was not being fully covered by commercial banks.
“We have increased our clientele base since inception and we are focusing on deepening our service to the unbanked class such as the informal sector which is not catered for by other financial institutions,” Vumbukani said.
Lesotho Post Bank is wholly-owned by the government of Lesotho and began operating five years ago.
It obtained a full banking licence from the Central Bank of Lesotho last year.
The bank currently has about 90 000 clients on its books and holds about M200 million worth of deposits.
“We are currently in the process of upgrading our service offerings.
“We are planning to introduce electronic transactions infrastructure which will allow us to increase our accessibility all over the country,” Vumbukani said.
Lesotho Post Bank last year received a US$1.3 million grant from the Millennium Challenge Account to improve its services to the public.
It also received US$400 000 from the World Savings Bank Institute to introduce an electronic transaction system that would allow the bank to set up smart accounts for clients instead of the manual book system.
“The smart account will use the usual PIN code system and at a later stage it will include the biometric system for illiterate consumers,” Vumbukani said.
The system is expected to start operating by next April.
It also expected to see the introduction of 100 point-of-sale devices in retail shops as well as at all the bank’s 13 branches country-wide.
Vumbukani said there were also plans to offer micro-loans to small, medium and micro enterprises as well as small loans to individuals.
“Next year we want to extend to micro-loans into the informal sector such as hawkers. We also plan to diversify into other products such as micro-leasing,” he said.
Vumbukani said the bank’s current clients included savings clubs, stockvels as well as individuals.
“We need to provide services and people have to have regular income to be able to save and borrow funds.
“We have to harness the funds from the informal sector so that it can improve its operations and be able to operate formally,” he said.
Vumbukani said the 2008 financial crisis had hit most financial institutions hard forcing the Post Bank to diversify and offer full banking services to its clients.
The crisis had also resulted in an improvement in operations, Vumbukani said.
“We are planning to increase the number of branches from the current 13 to 18 in the next five years,” he said.
