Regulatory AlertsLesotho: fintech & payments regulation
RegulatedCBN regulates fintech via Payment Systems Act 2014; e-money & MT licenses required
- Lead regulator
- Central Bank of Lesotho
- Also involved
- Financial Services Board (insurance/intermediaries) · Revenue Service (tax)
- Core law
- Payment Systems Act, 2014
- Entry capital
- M 2m (E-money Issuer)
- Approval timeline
- 6-12 months
- Customer assets
- Segregated trust account required
- Data protection
- Data Protection Act 2021 · Data Protection Authority
- Sandbox
- No
The Central Bank of Lesotho (CBL) is the primary supervisor for fintech and payment services under the Payment Systems Act 2014. The regime requires specific licensing for e-money issuers and money transfer operators, with strict capital and governance standards. Agent banking is permitted under the 2024 regulations but must be tied to a licensed institution.
Which licence do you need?
| Your activity | Requirement | Capital | Timeline | Authority |
|---|---|---|---|---|
| Payment processing / gateway | Uncertainverify with regulator Payment processors may fall under e-money or MT licenses | — | — | — |
| E-money & wallet issuance | LicenceIssuer of Electronic Payment Instruments[1] Minimum unimpaired capital M 2m; customer funds must be safeguarded | M 2m | — | Central Bank of Lesotho |
| Domestic money transfer | LicenceMoney Transfer Operator[2] Licensing under Financial Institutions Act 2012; fit-and-proper tests apply | — | — | Central Bank of Lesotho |
| Cross-border remittance | LicenceMoney Transfer Operator[2] Cross-border transfers require Money Transfer Operator license | — | — | Central Bank of Lesotho |
| Agent network | RegistrationAgent Banking[3] Agents must be appointed by licensed financial institutions | — | — | Central Bank of Lesotho |
| Open banking / account information | Unregulated No specific open banking framework identified | — | — | — |
| Foreign-exchange services | LicenceForeign Exchange Bureau[4] Type IV license required; fit-and-proper assessments mandatory | — | — | Central Bank of Lesotho |
New — what changed recently
- 2024-01-01Financial Institutions (Agent Banking) Regulations, 2024 — Established comprehensive licensing and operational framework for banks appointing agents as delivery channels.[3]
- 2023-01-01Financial Institutions (Amendment) Act 2023 — Modernized regulatory oversight for traditional money lenders and microfinance operators.[5]
- 2023-01-01Central Bank (Capital Markets) (Amendment) Regulations, 2023 — Standardized licensing procedures and fee schedules for securities exchanges and advisers.[6]
Market-entry checklist
- 1Secure CBL LicenseApply for Issuer of Electronic Payment Instruments or Money Transfer Operator license.
- 2Meet Capital RequirementsDemonstrate minimum unimpaired capital of M 2m for e-money issuance.
- 3Safeguard Customer FundsEstablish segregated trust accounts for all customer funds held.
- 4Pass Fit-and-Proper TestsEnsure directors and key personnel meet CBL fit-and-proper criteria.
- 5Register Data ProtectionComply with Data Protection Act 2021 and register with the Authority.
Sources
- Payment Systems (Issuers of Electronic Payment Instruments) Regulations 2017
- Financial Institutions (Money Transfer) Regulations, 2014
- Financial Institutions (Agent Banking) Regulations, 2024
- Financial Institutions (Foreign Exchange Bureau) Regulations 2014
- Financial Institutions (Amendment) Act 2023
- Central Bank (Capital Markets) (Amendment) Regulations, 2023