In-depth market analysis with recommendations for shifting remittances to regulated channels
This paper assesses international remittance services in Lesotho. It finds that existing commercial bank channels are rarely used and international money transfer operators have a limited presence in Lesotho. Innovative channels, such as the mobile money services and Shoprite cash-to-cash services, have the potential to substantially formalize inward remittances and encourage the move towards digital payments, and broader financial inclusion.
The paper argues that authorities in Lesotho should enhance the payment systems infrastructure, harmonize the legal and regulatory framework, enhance financial literacy, and encourage remittance service providers to be more active in the remittance market. In addition, the authorities should clarify the consumer protection and dispute resolution framework for financial services.