The Lesotho PostBank, with the support of IFAD,
and under the Rural Finance Intermediation
Programme(RUFIP) will be introducing
micro-financing, in Lesotho.
Micro Financing refers to the provision of small
or as the name suggests micro financial services
targeting the unbanked and under banked market
and include savings products, loans, micro
leasing, micro insurance and remittances/money
This business concept strikes a harmonious cord
with the Lesotho PostBank’s mandate of banking
the un-banked. The Lesotho PostBank will thus
launch micro loan products for the active poor.
The active poor are clients engaged in some form
of micro enterprises.
The main differentiator that makes micro
financing work for the active poor is that it
makes use of collateral substitutes in the
absence of the conventional collateral.
Collateral substitutes can be – compulsory
savings (a percentage of the required loan
facility), peer pressure and some
co-guaranteeing from fellow group members in
case of group lending methodology.