The Government and the Central Bank of Lesotho (CBL) are currently engaged in concerted efforts to assist both Boliba Cooperative Society and MKM Burial Society, to regularize their activities.

In a press statement issued by the CBL, as a public warning with regard to the emerging pyramid schemes in Lesotho, Governor of CBL, Dr. Moeketsi Senaoana has been quoted as saying that with regard to Boliba, both the government and the CBL are providing assistance towards turning the institution into a bank.

Dr. Senaoana stated that as for MKM, the aim is to ensure that they comply with the laws of the land and those set in the international arena, regarding financial transactions.

He pointed out that legal instruments such as Financial Institutions Act, 1999, Societies Act 1966, Cooperatives Societies Act, 2000, Money Lenders Act 1989, Lesotho Building Finance Institution Act, 1976 and Insurance Act 1976 are meant to provide regulation of the activities that fall under them.

Furthermore, he highlighted that the Financial Institutions Act, 1999 as an example, empowers the CBL to license and regulate financial institutions in the country.

The act, he said further empowers the Central Bank to constantly ensures that depositors' funds are protected, through ensuring that the overall operations of a given institution are sound.

And that the Governor of CBL, serves as a Commissioner of Financial Institutions, and has developed the ancillary laws that regulate these institutions.

Dr Senaoana, described the collapse of financial institutions as having adverse effects on the economy as a whole, with direct impact on the citizens. He added that citizens or subscribers are the ones who bear the heavy costs of the revival of the financial institutions.

The CBL chief, cited the collapse of the Lesotho Bank and the Lesotho Agricultural Development Bank, as a typical example of non-compliance to the stipulations of regulations set by the Central Bank, costing government M800 million of tax payers money.

SOURCE: LENA 26/09/2007