MASERU — The department of co-operatives says it is in the process of setting up a fund to provide financial assistance to co-operatives in distress.
The commissioner of co-operatives, ‘Maphamoli Lekoetje, confirmed the development.
Lekoetje told the Lesotho Times on Monday that the central co-operative fund will provide finance to co-operatives and boost employment in the sector.
“Funding for our co-operatives has been a challenge and this has hindered their development.
“The fund will be accessible only to co-operatives,” Lekoetje said.
To ensure that the fund is sustainable, participating co-operatives will contribute a certain percentage of their profits towards the fund which will be managed by Coop-Lesotho, the apex body for all co-operatives in the country.
“We expect that the fund will be fully operational from the first quarter of next year as we are currently developing the management structures of the fund,” Lekoetje said.
She said Lesotho was working in partnership with international co-operative development organisations such as the Coop-UK to improve capacity and skills for local co-operatives.
Most co-operatives in Lesotho were mostly involved in agriculture but have since diversified into other economic sectors such as tourism with the youth playing a significant role in the growth of the sector.
The youth are also involved in other sectors such as agro-businesses, handicrafts and professional consultancy.
“The youth co-operatives have been very successful over the past three years and they are in different sectors of the economy,” Lekoetje said.
She said these youth co-operatives had performed extremely well over the years with most of them being very strong in their levels of management and governance.
But most of the co-operatives have been criticised for their gross inconsistency.
A recent report by a PhD student from the UK, Sally Hartley, said most youth co-operatives in Lesotho were being formed by young people starting at age 15. Lekoetje said the income generated from these co-operatives was enough to allow the youths to buy necessities such as food which prevents poverty and unemployment.
“The youth co-operatives are involved in income-generating activities which help young people to contribute to the economy from an early age,” she said.
“Members in co-operatives learn about financial management and how to run businesses.”
“We are looking into encouraging local financial co-operatives to offer small loans to youth co-operatives to increase their operations.”