ROUGHLY nine months after being accused of deliberate non-compliance and lack of remorse towards the country’s laws by the Lesotho Communications Authority (LCA), Vodacom Lesotho (VCL) has taken a giant step to allow its M-Pesa division to operate as an independent company known as VCL Financial Services.
business
July 13, 2021
NEO SENOKO
3 min read
Mpesa goes independent
VCL Managing Director, Mohale Ralebitso
Vodacom Lesotho made this announcement on Monday.
Authorised by the Central Bank of Lesotho (CBL), the entity will be a licensed financial services provider, fully owned by Vodacom Lesotho.
These developments come roughly nine months after the telecommunications company was involved in a bitter fight with the regulator, LCA over a number of complaints.
Among other things, the LCA accused Vodacom Lesotho of refusing to amend its trial balance to reflect M-Pesa revenue as other revenues on the basis that it was a Vodacom group template that they were not prepared to amend.
With the case between the two elephants still pending in the High Court, Vodacom Lesotho has now decided to separate its M-Pesa operations.
“Our policy ensures that our compliance to relevant laws and policies is not only accurate and meticulous but also enhances the spirit and intent of those instruments to achieve a higher goal of enhancing the quality of national corporate governance and accountability systems.
“In this regard, our board of directors took a conscious decision to recommend the separation of our M-Pesa operations to effectively satisfy the dual purposes of complying with the regulatory requirements as well as enhancing our design of financial services unit to make it more responsive, efficient and effective in addressing national and individual financial management needs,” said VCL Chairman of the Board, Leboela Lebete.
He said the Board of Directors has engaged extensively with its technical and regulatory partners as well as listened to customers to bring highly advanced fintech services which everyone can all be proud of.
“We continue to draw lessons from the rest of the world on how we may align with fast changing innovations in the global payments and investment systems. All in all, we seek to put the interests of the country and of our customers first to package fintech products and services that are sensitive and responsive to unique conditions that prevail in the country to ensure that everyone is allowed to grow at a steady and comfortable pace using our services.
“We shall never stop to learn and seek counsel where necessary for we remain humble enough to know that we do not have all the wisdom needed to develop the best innovations,” the Chairman added.
Since its launch in 2013, M-Pesa, according to VCL, has grown from only 1 900 registered customers to over one million, with monthly transaction values surpassing LSL one billion.
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M-Pesa has come so far as a revolutionary financial service and driver of financial inclusion and economic empowerment. Initially, only two products were available, but now the service offers everything from savings and insurance products to cross border transfers and ticketing among others.
M-Pesa now has over 8 000 agents and more than 3 000 merchants across the country.
“Given M-Pesa’s phenomenal success, even against the backdrop of global economic decline, the natural next step was to make M-Pesa an independent entity, ensuring that it is well positioned to deliver on its growth ambitions,” VCL Managing Director, Mohale Ralebitso said on Monday.
For her part, VCL Financial Service Head, Palesa Mphunyetsane said the move enables the brand to further diversify its products offering, with the aim of becoming a fully-fledged financial service institution.
“This will see us bring more solutions to the market, helping to address a number of societal challenges regarding payments and collections. Our focus will be on savings and investments, lending solutions for individuals and small, medium, and micro enterprises (SMMEs), wealth management, payments and collections and the digitisation services. From a customer point of view, all branding, support structures, contacts and infrastructure will remain the same,” Ms Mphunyetsane said. Vodacom Financial Services will also place significant emphasis on ensuring that enhance governance and controls are put in place, through the establishment of various departments including risk, internal auditing, and anti-money laundering and by strengthening strategic partnerships with relevant institutions.
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