2004年-世界发展银行全球_Lesotho___Financial_Sector_Review_84页_5mb

Summary of the Financial Sector Review of Lesotho (April 2004)

Core Content

This report provides an analysis of the financial sector in Lesotho, focusing on the macro-financial environment, the structure and performance of the banking system, the role of non-bank financial institutions (NBFIs), and the challenges in financing micro, small, and medium enterprises (MSMEs). It is based on data collected during a March 2003 mission and highlights key issues and recommendations for improving the financial system's efficiency and effectiveness.

Main Points and Key Information

1. Currency and Exchange Rate

• Lesotho Loti (LS) is pegged at US$0.132.
• The Common Monetary Area (CMA) includes Lesotho and South Africa, with the South African Rand (ZAR) circulating alongside the Loti as legal tender.
• Due to the parallel circulation of ZAR, it is difficult to determine the exact amount of Rand in Lesotho.

2. Acronyms and Definitions

• CMA – Common Monetary Area
• AGOA – African Growth Opportunity Act
• LHWP – Lesotho Highlands Water Project
• CBL – Central Bank of Lesotho
• LNDC – Lesotho National Development Corporation
• BEDCO – Basotho Enterprise Development Corporation
• LADB – Lesotho Agricultural Development Bank
• MSEs – Micro and Small Enterprises
• MSMEs – Micro, Small and Medium Enterprises
• NBFIs – Non-Bank Financial Institutions
• MFI – Microfinance Institutions
• LPB – Lesotho Postal Bank
• LNIC – Lesotho National Insurance Company
• LNGIC – Lesotho National General Insurance
• LNLI – Lesotho National Life Insurance
• LRA – Lesotho Revenue Authority

3. Financial System Structure

• The CBL is the dominant player in the financial system, with a large share of total assets.
• Commercial banks are mainly foreign-controlled, with Standard Bank being the largest.
• Non-bank financial institutions (NBFIs) are underdeveloped, with limited role in financial intermediation.
• Microfinance institutions are not present in the financial system.

4. Monetary Policy and Banking System

• Monetary Policy: The CBL maintains a one-to-one fixed exchange rate with the South African Rand (ZAR) by managing foreign reserves.
• T-Bill Rates: Lesotho T-bill rates have historically been lower than South Africa's, despite higher risks. However, the gap is narrowing.
• Banking System Performance:
  • The banking system has been profitable, with a net profit of 2.6% on average assets in 2002.
  • Total deposits and assets have declined in real terms from 2001 to 2003.
  • Non-performing loans (NPLs) are relatively low at 7.1% of total loans.
  • Liquidity is strong, with 25.9% of assets in cash and 52.3% in marketable securities (primarily T-bills).

5. Challenges in the Banking Sector

• Limited Competition: The banking sector is dominated by Standard Bank, with Nedbank as the only competitor. The Lesotho Bank is now largely controlled by Standard Bank.
• De Facto Cartel Pricing: Banks have engaged in de facto cartel-like pricing, with negative real deposit rates (3%) and high service charges.
• Lending Rates: Lending rates are higher than in South Africa, but this is justified due to the common money market.
• Market Entry Barriers: High minimum capital requirements (M10 million equivalent to USD1.25 million) for commercial banks and NBFI limit competition and innovation.

6. Non-Bank Financial Institutions (NBFIs)

• The NBFIs sector is underdeveloped, accounting for only 11% of total assets (excluding CBL) by 2002.
• LNDC and BEDCO are government-owned DFIs that no longer provide significant lending services.
  • LNDC is now focused on promoting industrial investment and has a strong balance sheet, but lacks synergy between financial and training activities.
  • BEDCO has ceased lending due to poor repayment performance and requires large government subventions.
• Standard Bank Lesotho Unit Trust is an innovative investment vehicle that may support future privatization efforts.
• Pension Schemes: The Lesotho Postal Bank (LPB) is proposed as a retail banking service, but risks are high, and lending is not permitted.

7. Financial Support for MSMEs

• The formal financial system has not effectively supported MSMEs.
• Government Programs:
  • The Industrial and Agroindustries Project disbursed $1.1 million but had high NPLs.
  • The Microfinance Reconstruction Fund managed by BEDCO was curtailed due to poor repayment.
  • The Rural Finance and Enterprise Support Project (RFESP) by IFAD aimed to promote group savings and borrowing.
• CBL Programs:
  • Export Finance and Insurance Scheme
  • Rural Savings and Credit Program
  • Development Finance Project
• Recommendations:
  • Remove interest caps to incentivize commercial banks.
  • Ensure that LPB is viable by solving accounting issues, limiting operations to break-even areas, and not allowing lending.

8. Key Recommendations

• Improve Competition: Encourage more private and foreign banks to enter the market.
• Reduce Barriers to Entry: Lower capital requirements for NBFIs to allow more financial institutions.
• Enhance Financial Services for MSMEs: Develop effective credit programs and improve access to financial resources.
• Strengthen NBFIs: Establish a coherent legal framework for leasing, hire purchase, and pension funds.
• Review Currency Policy: Consider whether Lesotho should maintain a separate currency or subcontract supervision to South African entities.
• Support LPB: Only re-establish Lesotho Postal Bank if financial viability and operational integrity are ensured.

9. Conclusion

The financial sector in Lesotho is small, undiversified, and dominated by foreign-controlled banks. While the CBL has managed to maintain a stable exchange rate and a relatively liquid banking system, the lack of competition and financial depth hampers its ability to support private sector development and MSME growth. The report emphasizes the need for reforms in regulatory frameworks, enhanced financial services, and greater integration with the South African financial system to improve the sector's performance.