Basotho utilise overdraft loan facility


Vodacom Communications Lesotho Managing Director, Palesa Mphunyetsane

from THABISO MAHLOKOHLA in Maseru, Lesotho
Lesotho Bureau
MASERU, (CAJ News) VODACOM Communications Lesotho’s (VCL) M-pesa mobile money transfer service clients are making the most of the company’s new short-term overdraft facility.

VCL Financial Services is offering the new Ntlatse facility.

Under this new facility a customer can top-up their M-pesa wallet when they run out of funds during a transaction. These transactions include, sending money, payment of bills or paying a merchant.

VCL Financial Services was formally granted a licence to operate by the central Bank of Lesotho on July 1, 2021 and is now running as an independent company offering a host of financial services, including the M-pesa platform.

Many Basotho prefer to do their transactions through the mobile money transfer network as opposed to commercial banks.

Previously, VCL Financial Services had only offered airtime advance through the M-pesa app but has now added more services on its platform with the launch of the Ntlatse overdraft facility on January 6 2022.

Since VCL is Lesotho’s largest mobile network with 1,2 million customers or more than half of the country’s population of 2,2 million, the facility has become an instant hit with most subscribers who use the M-pesa platform.

Some of the VCL subscribers who spoke to CAJ News Africa this week said they found the new service handy especially for emergency payment of bills such as electricity and water when they run out, as well as sending money to friends and relatives in times of distress.

While this new facility is available to all M-pesa customers, VCL Financial Services says the facility is not compulsory.

“Users can gain access to the service by pressing the USSD code *200# and then proceed with the transactional services they wish to use.

An overdraft facility will pop up in cases where the funds for the intended beneficiary are not enough and the subscriber is given an offer to choose an overdraft amount they wish to take,” the company stated.

In order to make the facility more effective and available to its subscribers, VCL Financial Services has partnered with a local company, Redeem Financial Services, in the new venture.

As an experienced loan provider, Redeem says it has availed its expertise to VCL Financial Services for the smooth running of the facility.

A spokesperson of the company says the awarding of the credit limit would depend on how long the customer’s creditworthiness and how that they need to have been using M-pesa for at least three months to be eligible.

Repayments can be done when a customer deposits their money into M-pesa and the amount owed is deducted automatically from their Ntlatse balance.

“Customer behaviour differs on M-pesa and each customer’s behaviour determines their individual score in our assessment, which is turn determines how much and how often a customer may receive a top-up from Ntlatse,” said Thuso Mpolo, chief operating officer at Redeem Financial Services.

VCL Financial Services managing director Palesa Mphunyetsane says the company had identified Redeem Financial Services as a strategic partner in this new venture because of their track record and accessibility to a wide range of customers.

“With this innovative solution, we are creating a better experience for our customers by affording them instant access to credit to enable them to make money transfers, pay bills and purchase from merchants, even when they have insufficient funds in their accounts,” she said.

Mphunyetsane also noted that that the Ntlatse platform would bring financial inclusion to all the unbanked sectors of the community and those who may be finding it difficult to access credit from other financial institutions.

“This function is also in line with the mission of M-pesa, which is to access to credit for those who cannot who cannot access credit,” she said.

Mphunyetsane also says VCL Financial Services was expanding its foothold in Lesotho through the facility as well as empowering Basotho-owned businesses such as Redeem.

As part of a global multinational mobile communication services provider Vodacom Group, VCL started its operations in Lesotho 1996 with the government as a shareholder through its stake in Lesotho Telecommunications Corporation.

When the government began its privatisation process in 1999, it invited bids for this share in Vodacom Lesotho.

In July 2000, Sekha-Metsi Consortium, a group of local business people and public figures, was announced as the successful bidder.

Sekha-Metsi holds a 20 percent share in VCL with the remaining share held by the Vodacom Group.

– CAJ News