Post Bank Chief Executive Officer (CEO), Mr. Molefi Leqhaoe said he is confident that a mini-project whose Memorandum of Agreement (MOU) was signed between the bank and the government is viable and sustainable.
He was commenting on the M10 million that the government of Lesotho has put in place for Post Bank to lend to small business owners as a measure to reduce unemployment in the country.
He said this project will differ with others because it is intended to address challenges such as financial illiteracy which he said will be addressed before money is given to small businesses and cooperatives.
'The purpose of the memorandum of understanding is to collaborate to ensure financial inclusion of cooperatives and Small Micro and Medium Entrepreneurs (SMMEs), to ensure that financial literacy is provided, that the businesses have access to finance, share information, ideas, statistics, and intelligence on the lessons learned regarding the implementation of the MOU and offer relatively competitive interest and bank charges in the developmental spirit for indigenous enterprises and entrepreneurs,' Leqhaoe said.
He said it is currently inclusive of all but when it progresses, its main target will be women and youth, however saying it is not going to exclude those who do not fall under these categories, including public servants.
He again said proposals can be made in various businesses from retailers to manufacturing so that it incorporates a large part of the business sector, adding that the project piloting will begin soon.
Meanwhile, Mr. Thabo Qhesi, from Private Sector Foundation commended the government for the initiative saying this what is needed for economic emancipation however noted that the flip side of it is that it can be risky if control terms are not tight.
'We need to ensure that our people are financially literate and they are certain of what they want to do with the money before it falls into their hands, because if that does not happen, the government and the bank are running a risk of unpaid loans', he said.
He cited Basotho Enterprises Development Corporation (BEDCO) as one of the stakeholders which can assist in capacitating the locals with business skills.
However, he observed that the M10 million may not be enough for the piloting stage because one cannot draw a conclusion on how the project is working based on such a small amount of money, especially when it is not for one district.
The money is part of the four decisions reached by the cabinet in efforts to address unemployment rate, a continuing economic decline and poverty in the country.