Lesotho Finance Minister Dr Mamphono Khaketla this week launched South African retail company Shoprite’s Money Transfer cross-border remittances facility in Maseru, Lesotho.

The pilot project would provide Lesotho citizens legally working and residing in South Africa with access to an affordable, convenient, safe and reliable money transfer cash-to-cash, person-to-person service.

The money could be sent from any Shoprite store in South Africa, including affiliated Checkers, U-save and OK Bazaar stores, to Shoprite stores in Lesotho.

This service was targeted at the unbanked workers who had been using informal ways and high-risk, high-cost channels to send money home to their families.

It would enable South African identity document or passport holders and Lesotho passport holders in South Africa to send any amount of up to R5 000 in a single money transfer transaction for a fixed fee of R9.99, which was paid by the sender. There were no fees charged to the recipient in Lesotho to receive the funds.

Started by nonprofit organisation FinMark Trust, which sought continuous advocacy for cheaper official remittance channels in the Southern African Development Community, the project would also seek to identify and highlight regulatory constraints that would inhibit the future expansion of the money transfers service for sending and receiving domestically in Lesotho, across the border into South Africa, and potentially to other common monetary area countries, including Swaziland.

This process was carried out through intensive consultations with the South African Reserve Bank, Shoprite South Africa and Shoprite Lesotho, as well as Capital Bank.

The Central Bank of Lesotho also approved the pilot project, with the Ministry of Finance “working tirelessly” with the development partners to promote innovative financial inclusion options for lower income groups.

No transfers from Shoprite Lesotho stores were contemplated for the pilot, as this would form part of a future project phase, which was currently under application with the Central Bank of Lesotho.