MCC Payment and Settlement Systems Activity

Lesotho - Private Sector Development Project - Payment and Settlement Systems Activity: The main objectives of the payment system modernization Project activity are the introduction of automated clearing and alternative payment options that will reduce payment and settlement times and lessen the use of cash and checks.

Another objective is to strengthen Lesotho's financial infrastructure and promote further integration of its payment and settlement systems with those of its neighbor, South Africa.

One of the primary focuses of this activity is to expand the reach of, and institutional participation in, the payments system by, among other things, adding functionality for telephone and other smart card transactions.

Another focus is to include the Post Bank in the payments system, which will greatly expand its reach and will provide benefits to rural populations relatively quickly.

MCC funding will support the following: (i) reviewing the legal and regulatory structure governing domestic and crossborder payments; (ii) harmonizing laws regarding cross-border payments and currency controls; (iii) paying for the initial year of the Automated Clearing House (ACH) provider's fee for implementation, consultation, training and contract execution in connection with making multiple payment streams available in Lesotho; (iv) paying for the costs associated with two imaging machines and ancillary hardware, software and training for operations at the Central Bank of Lesotho if the Central Bank of Lesotho and financial institutions agree to a system for delivering checks directly to the Central Bank of Lesotho from all bank branches for imaging and subsequent forwarding to the ACH provider; (v) paying for the costs associated with the distribution of payment options and channels, such as point of sales terminals; and (vi) implementing a public awareness campaign for banks and consumers with respect to this Project activity.