Question 1

What is On Point Financial Services?

Accepted Answer

On Point Financial Services is a microfinance institution operating in Lesotho. As part of Lesotho's expanding microfinance sector, the institution serves underserved individuals and micro, small, and medium enterprises (MSMEs) who typically lack access to traditional banking services.

The institution is registered with the Central Bank of Lesotho, which regulates all microfinance institutions in the country. On Point Financial Services contributes to Lesotho's financial inclusion efforts, which have grown significantly over the past decade, with 87% of the population having access to formal financial services as of 2021.

Question 2

When was On Point Financial Services founded?

Accepted Answer

[Information not publicly available]

While the specific founding date of On Point Financial Services is not publicly documented, the institution operates within Lesotho's microfinance framework that has been developing since the late 1980s and early 2000s. The sector experienced significant growth following the implementation of the Rural Financial Intermediation Programme (2008-2015) and the Support to Financial Inclusion Project (2009-2014).

Question 3

Where is On Point Financial Services headquartered?

Accepted Answer

[Information not publicly available]

The institution operates in Lesotho, a landlocked country in Southern Africa. Most microfinance institutions in Lesotho are concentrated in the Maseru District, which is home to approximately 27% of the country's population and serves as the primary commercial hub.

Question 4

Where does On Point Financial Services operate?

Accepted Answer

On Point Financial Services operates within Lesotho, serving communities across the country. Lesotho is administratively divided into 10 districts, with the majority of the population concentrated in three main areas: Maseru (27%), Leribe (17%), and Berea (13%).

The institution is part of a broader microfinance network in Lesotho that focuses on reaching underserved populations in both urban and rural areas. The microfinance sector in Lesotho has been expanding its reach through traditional branch networks as well as digital channels, particularly mobile money platforms.

Question 5

What services does On Point Financial Services offer?

Accepted Answer

As a microfinance institution, On Point Financial Services likely provides credit services tailored to the needs of underserved individuals and small businesses. Typical services offered by microfinance institutions in Lesotho include:

Credit Products: Short-to-medium term loans for MSMEs, including purchase order financing, invoice financing, and working capital loans. Many microfinance institutions in Lesotho focus on short-term loans that can be repaid within a year.

Target Clientele: Services are typically designed for individuals and businesses that do not meet the stringent collateral requirements of traditional banks, including government employees, private sector workers, and micro-entrepreneurs.

Flexible Terms: Microfinance institutions in Lesotho often offer flexible repayment systems and maintain a local presence in communities to ensure accessibility.

The Lesotho microfinance sector recorded M1.1 billion in total loans in recent years, with an 8.5% increase demonstrating the growing demand for these services.

Question 6

What makes On Point Financial Services unique?

Accepted Answer

On Point Financial Services operates in a market with significant unmet demand. In Lesotho, over 76,000 MSMEs exist, representing 90% of the country's businesses, yet only 17.5% have access to credit from microfinance institutions. This creates an estimated demand gap of between LSL 5 billion and LSL 15 billion (approximately USD 263 to 789 million).

The institution is part of an ecosystem supported by government initiatives including:
• The Partial Credit Guarantee Scheme run by the Lesotho National Development Corporation, which guarantees up to 75% of MSME loans
• The Lesotho Enterprises Assistance Programme (LEAP), providing technical and financial support to MSMEs
• The Competitiveness and Financial Inclusion (CAFI) Project, offering business support services

The microfinance sector in Lesotho has also been strengthened by collaboration with mobile money service providers, which help extend financial services to remote areas through digital channels.

Question 7

What type of financial institution is On Point Financial Services?

Accepted Answer

On Point Financial Services is a microfinance institution (MFI) regulated by the Central Bank of Lesotho under the Financial Institutions Act. Microfinance institutions in Lesotho are classified as formal non-bank financial service providers.

MFIs in Lesotho play a crucial role in the country's financial ecosystem, serving the 48% of the population that relies on formal non-bank financial service providers. These institutions are supervised by the Central Bank of Lesotho and must comply with regulatory requirements including licensing, consumer protection standards, and anti-money laundering regulations.

The regulatory framework for microfinance institutions in Lesotho has been strengthened in recent years, with the Financial Consumer Protection Act of 2022 establishing comprehensive rights for consumers of financial services and empowering the Central Bank to inspect and examine financial service providers.

Question 8

How does On Point Financial Services contribute to financial inclusion?

Accepted Answer

On Point Financial Services is part of Lesotho's broader financial inclusion strategy, which aims to make affordable, appropriate, and quality financial services accessible to all categories of the population and MSMEs.

The National Financial Inclusion Strategy (NFIS II 2024-2028) identifies several strategic priorities that institutions like On Point Financial Services help address:

MSME Support: Providing access to credit for businesses that create jobs, particularly for women under the age of 35. An estimated 76,000 MSMEs have created more than 118,000 jobs in Lesotho.

Economic Development: Supporting poverty reduction and economic growth by enabling small businesses and entrepreneurs to access capital for business development.

Alternative to Traditional Banking: Serving clients who are overlooked by mainstream banks due to factors like low or unstable income, limited collateral, or lack of formal credit history.

Microfinance services in Lesotho have demonstrated positive impacts, with participants reporting improved livelihoods, entrepreneurship development, and shifts in consumption patterns.

On Point Financial Services

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About On Point Financial Services in Lesotho