Find Banking and Financial Services expertise in Lesotho
- Banks
- Regulation
- Development
Banks
Lesotho has a small and concentrated banking system dominated by South African banks. Commercial banks in the nation consist of the South African-owned First National Bank, Nedbank Lesotho Limited and Standard Lesotho Bank, alongside the domestic Lesotho Post Bank. Lesotho PostBank was set up in 2004 as a publicly-owned savings institution with branches throughout the country. Access to banking services for households and SMEs within the financial system remains limited. This has been a criticism targeted at the banks, in particular the South African banks, by both the IMF and the African Development Bank, who critiqued their preference for short term government securities as a dominant form of lending. The non-banking financial sector is fairly undeveloped, due to a small domestic market.
Regulation of Financial Services
Financial services are regulated by the Central Bank which fosters competition in the sector. It is responsible for the supervision of commercial banks, alongside non-banking financial institutions, the money-lenders and insurance companies. As of 2000 the primary objective of the bank is the achievement and maintenance of price stability in the economy. Along with Namibia and Swaziland, Lesotho is a member of the Common Market Arrangement (CMA) of Southern Africa, which effectively integrates the financial and capital markets of those countries with those of South Africa. The World Economic Forum Global Competitiveness Report (2012-2013) ranks Lesotho 88th in terms of the soundness of its banks with a value of 4.9 out of 7, just below the world mean of 5.1.
Development of Financial Services
In the World Bank’s Ease of Doing Business Index Lesotho ranked 150th in the world (out of 183 countries) for getting credit, and 147th for protecting investors, below the average for Sub-Saharan nations in general in both categories. In the World Economic Forum’s Global Competitiveness Report (2012-13) Lesotho placed 131st in the world (out of 144 countries) for availability of financial services, with a value of 3.4 out of 7, below the mean of 4.2. It was similarly below average in relation to affordability of financial services, ranking at 134th. In relation to financing through the local equity market its value was a very low 2.1 out of 7, compared to the world mean of 3.5, placing it at 135th. For ease of access to loans, Lesotho ranked 108th in the world with a score of 2.3 out of 7, below the world average of 2.9.
| Banking and Financial Services organisations in Lesotho | |
|---|---|
| Agricultural Development Bank |
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| Central Bank of Lesotho |
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| First National Bank |
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| Lesotho Postal Bank |
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| Lesotho Postbank (LPB) |
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| Nedbank Lesotho |
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| Standard Lesotho Bank Ltd |
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