Mbabane: The Kingdom of Eswatini is one of the most financially included countries in the Southern African Development Community (SADC) and has positively developed and resulted in a notable expansion of financial inclusion exceeding set targets.
This was reviled by the Centre for Financial Inclusion (CFI) Chief Executive Officer David Mfanimpela Myeni in an interview with this publication last month.
The Centre for Financial Inclusion (CFI) is a semi-autonomous body under the Ministry of Finance (MoF) which is responsible for taking the lead in coordinating the implementation of the Financial Inclusion Agenda for the country. CFI is also mandated to ensuring the creation of sensitization and awareness of the participation of all the key stakeholders, the alignment of the business and financial policy environment, research, development and monitoring the impact of the implementation of the Agenda on poverty reduction.
Financial inclusion refers to the level at which individuals and businesses are at regarding access to useful and affordable financial products and services that meet their needs.
According to Myeni, the country has reached and exceeded its targets even before the set deadlines. The set target for the Centre for Financial Inclusion was to reduce financial exclusion from 27 per cent to 15 per cent by 2022. In a report released by CFI, the State of Financial Inclusion Report 2019 shows that the target has already been achieved.
Eswatini has been able to reduce exclusion form 27 per cent to 13 percent in 2018. This, according to Myeni is a major milestone achieved, which the country prides itself with over other countries in the SADC region.
According to the SADC financial inclusion report, Eswatini is ranked 5th in terms of the overall banked population with 54 per cent compared to other SADC countries. The report provides key facts about financial inclusion in the SADC region. Conducted in 14 SADC countries, the report states that in total, 68 per cent of adults in the region are financially included (including both formal and informal financial products/services) which constitute of around 97 million individuals. Overall levels of financial inclusion vary considerably across the region at the top with 94 per cent being Seychelles, followed by Mauritius at 85 percent, South Africa third at 77 per cent Namibia 62 per cent and Eswatini at 54 per cent. Tanzania shows the highest levels of overall financial inclusion.
Myeni added that in Eswatini there has been a substantial increase in the formal financial inclusion since 2011, adults who are exclusively dependent on formal financial mechanisms has been reduced from 13 per cent in 2011 to 2.0 per cent in 2018 while the number of excluded adults has been reduced from 38 per cent in 2011 to 13 per cent in 2018.
This is also contained in a report “the Eswatini State of Financial Inclusion report 2019” which was compiled by the Centre for Financial Inclusion (CFI), together with FinMark Trust (FMT) and the Central Statistics Office (CSO).
The report highlights that 4 in 5 adults in Eswatini have at least one transactional account, 70 per cent of which is mobile money and 50 per cent is a bank account. It also reveals that about two thirds of adults in Eswatini have used digital payments. The report has also highlighted increased usage of transactional accounts and digital payments, which were the main drivers in the increased financial inclusion.
The report states that a large majority of Eswatini adults consists of about 72 per cent lives in the rural arears. In 2018 the proportion of financially included adults stood at 85 percent. Regarding the comparison of urban and rural arrears, 90 per cent of the eligible urban population is financially included compared to 83 percent of the eligible rural population. In terms of gender 83 per cent of the eligible male population is financially included as compared to 87 per cent of the eligible female population.
Banking in Eswatini is mainly driven mainly by payments, savings products and remittances. About half of the adult population has bank accounts. The main reason why people are banked is due to the use of remittances and transfers.
Introduction of mobile money made it easier for people to be able to transfer money across for their personal and business use. This has aided in increasing the rankings in financial inclusion.
About 95 per cent of adults in Eswatini have access to a mobile phone, with females at 95 percent, having slighter access compared to men which are at 94 per cent. About three in every four adults use mobile money.
The access to mobile money seems to be very increasing allowing 84 per cent of adults to access mobile money points within 30 minutes. Access to mobile money within 30 minutes is 79 per cent below the national average of 84 per cent.
Although a lot has been done and huge improvement and exceeding targets, Eswatini still needs to operationalize the implementation of the country’s MSME financial inclusion road map and at the same time enhance Agriculture finance to improve the contribution to livelihoods and economic growth.
More focus still needs to be put in financial consumer education through providing a formal nation consumer education strategy. This will also provide a framework to guide the implementation, facilitate the mobilization, stakeholder coordination and monitoring
Eswatini government still needs to continue putting more efforts in monitoring and evaluation of financial inclusion targets.