Mbabane- Businesses in Eswatini without assets to pledge as security continue to face barriers to bank financing, despite liquidity in the banking sector, with domestic credit to the private sector standing at 21.2% of gross domestic product (GDP).
The African Development Bank Group’s (AfDB) Country Focus Report 2026 puts Eswatini’s private sector credit-to-GDP ratio 3.7 percentage points below the Sub-Saharan African average of 24.9%, highlighting the constraints facing businesses seeking capital to expand operations, invest in equipment and increase production.
The financing gap points to a challenge beyond the availability of money in the banking system, the ability of businesses to qualify for loans under existing lending requirements.
According to the International Monetary Fund’s (IMF) 2025 Article IV consultation report, inadequate collateral and unclear property rights remain significant obstacles to accessing finance in Eswatini. Businesses without assets that lenders can accept as security may struggle to obtain funding, even when they have viable expansion plans.
This presents a particular challenge for small and medium-sized enterprises (SMEs), which need capital to grow but may lack the property and other assets required to secure conventional bank loans.
The IMF reported that private sector credit growth slowed to 5.9% in 2024, from 9.6% in 2023, indicating a deceleration in lending to businesses and households.
The slowdown, alongside the relatively low credit-to-GDP ratio, raises questions about how effectively the country’s financial system is converting available liquidity into financing for productive economic activity.
The IMF has identified credit guarantee schemes and the collateral registry as measures that have made progress in addressing lending constraints. However, it has called for these initiatives to be expanded to improve their impact.
Credit guarantees can help eligible borrowers who lack sufficient security obtain financing by reducing part of the lender’s exposure to potential losses. A collateral registry, meanwhile, can improve the use of movable assets as security, potentially allowing businesses without conventional property holdings to qualify for credit.
The IMF has also recommended strengthening property rights, improving financial literacy and expanding credit information-sharing systems to help lenders assess borrowers more effectively.
For businesses, the effectiveness of these interventions will depend on whether they translate into greater access to loans on terms that support sustainable investment.
The AfDB has similarly called for stronger credit infrastructure, effective regulation and better coordination among institutions to improve the financial system’s capacity to support economic growth.
Beyond lending reforms, the IMF has pointed to public debt management and the development of the domestic debt market as areas requiring attention. Better management of government borrowing could help reduce borrowing costs over time, potentially easing pressure on reference interest rates for private sector lending.
Eswatini’s private sector credit ratio compares with a Sub-Saharan African average of 24.9%, although differences in economic structures and financial markets mean that a higher ratio does not necessarily translate into better financing outcomes.
The immediate challenge, however, is to address the barriers that prevent viable businesses from securing capital. Without broader access to appropriate financing, enterprises may find it difficult to expand production, invest in equipment and create jobs.
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