- After the privatisation of Lesotho Bank did off with most of the country's smaller bank offices, many rural areas were left without services. The Lesotho government therefore next week is to launch a new network of rural branches operated from the country's post offices, the PostBank.
The first PostBank is to open on Monday, 24 January, the Basotho government said in a statement today. The first of a four phased introduction of the Lesotho PostBank to the people occurs on Monday, when operations at the Maseru central branch will commence.
After the opening of PostBank services in Lesotho's capital, the town of Pitseng will be next with its opening on 27 January. This is to be followed by the branches in the towns of Semonkong and Machache on dates still to be announced, the government said.
Lesotho's Public Affairs Officer, Miss Tiisetso Matete said the Lesotho PostBank envisages ultimately operating "47 branches throughout the country, most of which will be situated in the rural areas."
The establishment of this new banking network was already announced in Parliament by Finance Minister Timothy Thahane on 16 February 2004, when holding his budget speech to Parliament for the 2004-05 fiscal year. Minister Thahane proposed that maluti 39.8 million be allocated to the Ministry of Communications, Science and Technology for the launching of the PostBank.
This bank service, said the Minister, would "provide banking services in many rural areas left without services when the old Lesotho Bank closed." He announced that the new banking service would only operate in a "pilot phase" this year.
Banking services have been limited all over Lesotho for a number of years. Until the 1990s, the government run most banks operating in Lesotho, however with a poor financial result and with great losses due to unwise lending policies. Nevertheless, the former state-owned Lesotho Bank had a relatively wide network of branches throughout the mountain kingdom, also providing services in rural districts.
In 1999, the government privatised the state-owned bank, which was renamed Lesotho Bank 1999 Ltd. After liquidating non-performing loans of the bank, 70 percent of its shares were sold to South Africa's Standard Bank Investment Corporation (Stanbic). The remaining 30 percent in Lesotho Bank 1999 is still on government hands. During the re-capitalisation of the bank, most of its rural branches were closed.
While the privatisation of Lesotho Bank soon showed positive results in the bank, the social consequences proved to be severe. As with other privatisation campaigns, many jobs were lost.
Further, the loss of banking services in rural districts has influenced development efforts there. Ironically, the government now reintroduces state-owned banking services in these areas with the new PostBank.
Meanwhile, in the Basotho capital, free market policies have assisted in the establishment of a new and vital banking sector. While Maseru until recently was dominated by poor performing state-owned banks, four commercial banks now operate in the citiy. Most are controlled by South African capital.
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