By Phesheya Ian Kunene
MBABANE — The Financial Services Regulatory Authority (FSRA) has announced a transformative initiative enabling non-banking financial institutions in Eswatini to evolve into fully-fledged banks.
This bold move is expected to reshape the country’s financial landscape, fostering greater competition, innovation, and accessibility of financial services to underserved communities.
At a recent stakeholder engagement, FSRA CEO Ncamiso Ntshalintshali outlined the vision behind the initiative, describing it as a strategic step towards creating a more inclusive and resilient financial ecosystem. “This initiative isn’t just about licensing more banks; it’s about empowering institutions to grow, innovate, and better serve the needs of businesses and individuals across Eswatini,” Ntshalintshali emphasized.
Bridging the Financial Gap
Non-banking financial institutions, such as microfinance providers, credit unions, and savings cooperatives, already play a critical role in reaching unbanked and underbanked populations. By transitioning into banks, these entities will be able to offer a wider range of services, including deposits, loans, and tailored financial products, thereby amplifying their economic impact.
Ntshalintshali highlighted the potential benefits for small and medium enterprises (SMEs), which often struggle to access affordable credit. Expanding access to banking services through this initiative is expected to drive economic growth, job creation, and financial inclusion, especially in rural areas where formal banking is limited.
A Collaborative Framework
The FSRA’s initiative is being implemented in close collaboration with the Central Bank of Eswatini (CBE), which oversees the licensing process. Together, the two institutions are developing a robust regulatory framework to ensure aspiring banks meet stringent requirements, including capital adequacy, governance standards, and sound risk management practices.
Inspiration for the initiative has been drawn from successful models in countries such as Rwanda and Kenya. These examples demonstrate how strategic regulatory support can enable smaller financial institutions to thrive while maintaining stability in the sector. The FSRA plans to provide technical assistance and training to help non-banking entities navigate the complexities of becoming banks.
Opportunities and Challenges
Experts have praised the FSRA’s efforts, citing its potential to transform Eswatini’s financial sector. Increased competition is expected to result in lower fees, better interest rates, and more innovative financial products for consumers. Newly licensed banks could play a pivotal role in reducing financial exclusion, empowering communities, and enhancing economic resilience.
However, Ntshalintshali acknowledged that the transition process is not without its challenges. Aspiring institutions will face rigorous evaluation criteria, including assessments of financial health, operational capacity, and strategic vision. The FSRA has also implemented strict measures to protect consumers and ensure the stability of the financial system.
“This is not a shortcut to becoming a bank. It’s a structured process that ensures new banks contribute meaningfully to the economy while safeguarding public trust,” Ntshalintshali stated.
Building a Sustainable Future
To support the transition process, the FSRA plans to launch additional programs, including financial literacy campaigns, capacity-building workshops, and ongoing technical support. These efforts aim to prepare newly licensed banks for the complexities of the financial sector and ensure their long-term success.
“Our ultimate goal is to create a financial sector that drives inclusive growth, empowers communities, and enhances economic resilience,” Ntshalintshali concluded.
As Eswatini positions itself to compete in a rapidly evolving global economy, the FSRA’s initiative is seen as a pivotal step toward building a diversified and sustainable financial system. By empowering non-banking institutions to transition into banks, the regulator is laying the foundation for a brighter future where financial services are accessible to all citizens, and the economy thrives on innovation and inclusivity.
