Central Bank on awareness campaign to boost financial inclusion, grow MSME

RETHABILE MOHONO

MASERU – The Central Bank of Lesotho has stepped up efforts to promote the Lesotho Registry of Interests in Movable Assets (LeRIMA), a landmark initiative aimed at increasing access to credit for Micro, Small, and Medium Enterprises (MSMEs) and tackling Lesotho’s persistently high unemployment and poverty rates.

At an awareness workshop held this week, stakeholders from across the financial landscape – including representatives from the Government of Lesotho, the World Bank, the Central Bank of Fiji, and local financial institutions – gathered to assess the progress of LeRIMA since its launch in 2021.

Bafokeng Noosi, Director of Financial Institutions Supervision at the Central Bank of Lesotho, highlighted LeRIMA’s role in democratizing access to finance. “LeRIMA has enabled Basotho to access credit by allowing their movable assets to be used as collateral by credit providers, including banks, microfinance institutions, insurers, and retailers,” he said.

Unlike traditional lending systems that typically require immovable assets like land or property as collateral, LeRIMA empowers borrowers – especially small business owners – to use a wide range of movable assets, including farming equipment, machinery, and vehicles, to secure loans.

This has proven especially transformative for individuals and businesses that lack access to formal banking services. Noosi emphasized that the registry has not only expanded access to credit for MSMEs but also improved the overall performance of the financial sector’s credit loan portfolio.

“We have worked hand in hand with stakeholders over the years to develop the law and registry system. We believe now is the right time to assess how far we have come and how well we are achieving the reform’s original goals,” he noted.

Molise Sethobane, from the Central Bank’s Non-Banks Division, said the government recognized early on the need to provide a legal framework that allowed movable property to serve as loan collateral.

LeRIMA was established to meet this need, with three key objectives: to allow for the creation of security interests in movable property, to define priority among competing claims on movable property and to provide a centralized and transparent registry system for lenders and borrowers.

Microfinance institutions have especially embraced LeRIMA, using it as a tool to serve clients previously excluded from formal financial services. These lenders now regularly accept non-traditional forms of collateral, enabling thousands of Basotho to start or expand small businesses.

As the Central Bank continues to drive financial sector reforms, the awareness campaign around LeRIMA signals a renewed commitment to inclusive economic growth.

With stronger access to credit and more opportunities for entrepreneurship, the initiative is widely seen as a vital lever for Lesotho’s long-term development.