By Tebello Moalosi MASERU — Finance Minister, Timothy Thahane yesterday appealed to commercial banks to lower service charges to encourage people to deposit their monies.
Addressing parliament during his 2012/2013 budget speech, Thahane said demand for loans had decreased due to high interest rates charged by commercial banks.
He said interest rates had soared despite an initiative by the Central Bank of Lesotho (CBL) to ensure effective and sound management in financial sector and the enactment of the Financial Institutions Act 2011 by the parliament.
“I want to appeal to the commercial banks to review their fees and charges relative to the interest rates they charge and risk profile of customers,” Thahane said.
“Clearly these charges undermine government policies to encourage the public to put their money in commercial banks.”
The lower the bank charges the higher the demand for loans, Thahane said.
Thahane’s appeal comes barely a week after he launched the M50 million Partial Credit Guarantee Fund (PCGF) meant to help the youth and women access loans from commercial banks.
The fund was established by the government upon realisation that many Basotho do not have access to loans because they lack collateral.
The government will pay 50 percent or more of the collateral while the remaining risk will be shouldered by the banks.