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Lesotho: lending & credit regulation

Regulated

Lesotho lending regulated by CBL under 2014 MFIs Regs and 1989 Money Lenders Order

Lead regulator:
Central Bank of Lesotho
Key law:
Financial Institutions (Credit Only and Deposit Taking Micro-Finance Institutions) Regulations 2014
Last updated:
2026-07-12

The Central Bank of Lesotho (CBL) supervises formal lending through two primary frameworks: the 2014 Regulations for micro-finance institutions and the 1989 Money Lenders Order for traditional money lenders. Licensed banks are additionally subject to the 2016 Lending Limits Regulations to manage concentrated credit risk.

Formal credit providers must obtain specific licenses from the CBL, with distinct operational and capital requirements for deposit-taking versus credit-only micro-finance institutions. The regulatory environment is characterized by strict licensing procedures and standardized application processes overseen by the Commissioner of Financial Institutions.

Notable restrictions include a presumption that interest rates exceeding 25 percent per annum are excessive under the 1989 Order, alongside strict exposure caps for banks. The regulatory direction emphasizes financial stability and consumer protection through comprehensive oversight of lending activities.

Who regulates

  • Central Bank of Lesotho

    Primary supervisor of financial institutions, including banks, micro-finance institutions, and money lenders.

    [1][2][3]

Core laws & rules

  • Financial Institutions (Credit Only and Deposit Taking Micro-Finance Institutions) Regulations (2014)

    Establishes licensing and operational frameworks for micro-finance institutions, including standardized application procedures and minimum capital requirements.

    [2]

  • Money Lenders Order (1989)

    Regulates money-lending activities, mandates annual licenses, and presumes interest rates exceeding 25 percent per annum as excessive.

    [3]

  • Financial Institutions (Lending Limits) Regulations (2016)

    Establishes lending limits for licensed banks, capping exposures at 25 percent for single borrowers and related parties to mitigate concentrated risk.

    [1]

Licensing & registration

  • Micro-Finance Institutions

    Requires comprehensive licensing for both credit-only and deposit-taking MFIs, with standardized application procedures.

    [2]

  • Money Lenders

    Mandates annual licenses issued by the Commissioner of Financial Institutions. Timeline: Annual

    [3]

Restrictions & warnings

  • Interest rates exceeding 25 percent per annum are presumed excessive under the 1989 Money Lenders Order.

    [3]

  • Licensed banks must cap direct or indirect exposures at twenty-five percent for single borrowers and related parties.

    [1]

Direction of travel

  • Regulatory focus remains on mitigating concentrated risk and ensuring financial stability through comprehensive oversight of lending limits and licensing.

    [1][2]

Sources

  1. Financial Institutions (Lending Limits) Regulations, 2016 · 2016-01-01
  2. Financial Institutions (Credit Only and Deposit Taking Micro-Finance Institutions) Regulations 2014 · 2014-01-01
  3. Money Lenders Order, 1989 · 1989-01-01

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This guide is compiled automatically from 3 primary-source documents published by Lesotho's regulators, reviewed by RegAlert, and refreshed monthly (last updated 2026-07-12). It is not legal advice — always confirm requirements with the regulator or local counsel before acting.