The Lesotho SIMM Platform
Transforming Lesotho into the first African nation with a fully digital payment system.
Access to formal and semiformal financial services in Lesotho is limited, especially for the rural and low income population
Being included in the formal financial system helps people to make day-to-day transactions, safeguard savings and build working capital for productive investments. For the national economy, financial inclusion thus contributes to employment creation, income generation and resilience to economic shocks.
from commercial banks, the great majority of Basotho are excluded from the formal credit system.1 Limited accessibility, mountainous terrain and high pricing of banking products further constrain the usage of financial services.
This is why the Government of Lesotho has identified the increase of financial inclusion and access to credit as two of the top priorities, formulated in the National Strategic Development Plan (NSDP), the Vision 2020 and the Financial Sector Development Strategy (FSDS).
Mobile money can catalyze access to formal and semiformal financial services
As part of mobile financial services, mobile money is a tool to scale financial inclusion in a cost-effective way. Mobile financial services enable customers to transfer funds, pay bills, save, borrow and even acquire insurance coverage via mobile phones.
They can be used as a channel to offer innovative and low-cost credit, savings and insurance products and significantly reduce the costs of transferring money compared to traditional forms of money transfer. In addition, they allow people to buy goods and services, from health care to solar energy systems, that they otherwise could not afford, by offering a way to pay through installments or pay-as-you-go.
Sarah Kigwama works as a housekeeper and like many other urban workers in Nairobi, she supports her relatives. Each month, she sends about US$ 20 of her monthly salary to her mother, who lives in a rural village about 200 km away. “This has changed my life,” Sarah Kigwama said. “I feel so good because if she has no food in the house she just goes and buys food immediately, no suffering about hunger again”.3