By Phiwa Sikhondze
In the first quarter of 2024, Non-Bank Financial Institutions (NBFIs) in Eswatini continued to show solid growth, with total assets increasing by 1.38% compared to the previous quarter, reaching E104.96 billion, up from E103.53 billion in the last quarter of 2023.
However, the most notable achievement was the impressive 10.66% growth in assets when compared to Q1 2023.
The data, outlined in the Financial Services Regulatory Authority’s (FSRA) Quarterly Statistical Bulletin for Q1 2024, reflects a positive trajectory for the sector, bolstered by key segments, particularly credit providers and reinsurers.
Credit providers experienced a 21.60% rise in assets, while reinsurers saw a 14.16% increase. Both sectors played a pivotal role in the overall growth observed during this period.
The performance of other sectors within the NBFI space also showed positive trends. Retirement funds assets grew by 10.67%, demonstrating a steady recovery, while capital markets assets saw a 10.81% increase.
These sectors’ solid performance reflects their importance to Eswatini’s economy, with retirement funds playing a central role in capital market growth, given that 70% of capital market assets are invested on behalf of retirement funds.
The strong performance of the NBFI sector can be attributed to several factors, notably the growth in members’ remuneration, which drives contributions to retirement funds. Additionally, improved performance in financial markets has contributed to the appreciation of the fair value of assets, particularly those invested in foreign instruments.
While growth was recorded across most sectors, SACCOs and Development Finance Institutions (DFIs) showed more modest increases. SACCOs experienced a 1.30% growth in assets, while DFIs saw a more moderate increase of 2.60%. Despite the slower growth, these segments remain integral to the financial landscape in Eswatini.
The positive results observed in the NBFI sector serve as a testament to the resilience of Eswatini’s financial ecosystem. The sector’s growth reflects a broader trend of increasing financial intermediation, positioning NBFIs as key contributors to the nation’s economic development.