By Mbono Mdluli
MBABANE – The value of assets held by Eswatini’s non-bank financial institutions (NBFIs) has reached an impressive E104.96 billion, according to the Financial Services Regulatory Authority’s (FSRA) 2024 First Quarter Statistical Report.
This figure reflects a 1.38% increase from the E103.53 billion reported in the fourth quarter of 2023. Year-over-year, the growth is even more significant, with assets rising by 10.66%. The largest contributions to this growth came from credit providers and reinsurers, whose assets expanded by 21.60% and 14.16%, respectively.
Sector Performance Highlights
Retirement funds and capital markets also experienced notable growth, with assets increasing by 10.67% and 10.81% annually. However, the least growth was observed in Savings and Credit Cooperatives (SACCOs) and Development Financial Institutions (DFIs), which posted increases of just 1.30% and 2.60%, respectively.
The report attributes the growth in retirement fund assets to higher member remuneration, which drives contributions, and improved financial market performance, especially in foreign investments. Since 70% of capital market assets are tied to retirement funds, growth in the retirement sector has a cascading effect on capital markets.
Credit Intermediation Trends
The loan portfolio of NBFIs grew by 10.30% from the previous quarter, reaching E8.70 billion. Building societies and money-lending institutions accounted for the majority of disbursements, representing 68.94% of the total portfolio. However, the overall Non-Performing Loan (NPL) ratio rose to 7.87%, up from 6.87% in the previous quarter.
Money lenders maintained a relatively low NPL ratio of 3.60%, while building societies reported the highest at 12.8%. SACCOs and DFIs had NPL ratios of 8.7% and 8.6%, respectively.
Insurance Sector Developments
The insurance sector performed well annually, with premiums written increasing by 16.87% compared to the previous year, driven by growth in health, motor, guarantee, and engineering insurance. However, the long-term insurance sector reported a 16.75% decline in premiums, with significant reductions in disability, retirement funds, and unit-linked investment products.