Mbabane– Eswatini’s savings and credit cooperatives (SACCOs) have fallen below the Financial Services Regulatory Authority’s (FSRA) minimum liquidity requirement despite recording growth in assets, savings and lending during the first quarter of 2026, raising concerns over the sector’s ability to meet short-term obligations.
The FSRA Quarterly Statistical Bulletin for the First Quarter of 2026 shows that the sector’s aggregate liquidity ratio stood at 9.72 per cent, significantly below the regulator’s prescribed minimum of 15 per cent of member savings.
The decline comes against the backdrop of continued expansion in the cooperative financial sector. Total SACCO assets increased by 4.11 per cent during the quarter to E3.49 billion, driven by growth in net loans and financial investments.
Member confidence also remained strong, with savings rising by 3.37 per cent to E2.49 billion, while loans and advances grew to E2.50 billion, reflecting sustained demand for credit.
However, the report notes that the growth was accompanied by a sharp decline in cash and cash equivalents, suggesting that cooperatives channelled more funds into lending and investments than into readily available liquid assets. This ultimately pushed the sector below the minimum liquidity threshold required by the regulator.
Despite the liquidity challenge, the quality of loan books improved considerably during the quarter.
The sector’s portfolio at risk declined to 2.94 per cent, down from 4.19 per cent in the previous quarter and 5.30 per cent a year earlier, indicating fewer delinquent loans and stronger repayment performance by borrowers. Performing loans increased, while loans classified as watch, substandard, doubtful and renegotiated all declined.
The bulletin further shows that SACCOs increased their financial investments by more than 13 per cent to E507.28 million, with the bulk of those funds invested through professionally managed financial instruments, signalling a continued shift towards managed investment portfolios.
While the sector remained profitable, earnings came under pressure. Net income declined slightly to E27.16 million from E27.97 million in the previous quarter, largely due to lower non-operating income and higher operating expenses.
The findings suggest that although Eswatini’s SACCO sector continues to expand and members remain confident in cooperative savings institutions, maintaining adequate liquidity will be critical as institutions balance growth in lending with regulatory compliance.
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