Innovative financial systems can recover economy



MASERU – The informal sector, which supports a greater part of the population, is one of the hardest hit by COVID-19 pandemic, however, innovative financial systems would go a long way towards ensuring gradual economic recovery.

The Governor of the Central Bank of Lesotho (CBL), Dr Retšelisitsoe Matlanyane, has said. This, she said on Monday during the launch of the Money Month Campaign, adding that financial systems should look into these sectors that support most of the population when developing products.

The informal sector, Dr Matlanyane said is most affected in many economies, especially in Africa where it dominates. For that reason, financial systems should be innovative in developing products that support the informal economy, she also noted.

“So this would mean therefore that even as we develop products, let us look into these important sectors that support the greater part of the population. I know it might be difficult or there could be much more challenges in that space that include, lack of understanding but with a forum of this nature, we can actually consolidate it so that we address all these problems all at once,” Dr Matlanyane said.

In its ninth edition, the Money Month Campaign is an annual event organised by the government of Lesotho together with its development partners. It speaks to consumers of financial entities, including individuals.

The forum is usually targeted at giving information about the financial systems and creating awareness amongst the population of Lesotho on the basic concepts of engaging in financial contracts.

The campaign is aimed at inspiring children, youth and adults to learn about money, saving, creating livelihoods, gaining employment and becoming entrepreneurs.

While it is meant for everyone, the Governor said the forum would like to have young people being part of the initiative as well so that they understand their responsibilities as consumers.

This initiative, which is so far celebrated over 175 countries further raises awareness about the financial system contracts and the language of the finances.

Dr Matlanyane further detailed during the same event that financial institutions have to be much more active than they have been before with regard to including many people to the financial systems and possibly grow the economy.

“Trading, be it as a small or large scale has to be done through financial institutions. Financial institutions have to come to the fore to be able to serve the population so that economic activity continues, or if possible increases as well,” she added.

This way she said, economies will be able to generate the much needed economic growth that comes with employment as well.

She warned that these institutions can no longer wait and see whether the population comes on or investors go to their institutions to demand services.

Instead, Dr Matlanyane said financial institutions should normalise going out to the level of citizens that need services.

“For a long time in our country, it has been some sort of a tradition to have people being the ones who seek the services of the financial institutions. In this case, in order to save this economy,

I challenge financial institutions to go out there as well, to approach citizens and be able to help them in whatever way that they can in a manner that increases financial inclusion,” the Governor further urged.

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