SELECT LIMITED LEADS MARKET SHARE

MBABANE – Select Limited is leading the market share of credit institutions with 23 per cent of the total market share.

This is according to the Financial Services Regulatory Authority (FSRA)’s quarterly statistical bulletin for the fourth quarter of 2022. According to the bulletin, the market share of credit institutions in terms of assets slightly shifted during the quarter when compared to last year with First Finance losing three per cent market share and Select losing one per cent share and Letshego losing two per cent market share.

“However, these players continued to be market leaders in the credit institution space, contributing 80 per cent of the total market share,” read the bulletin. It was highlighted that the other players all gained two per cent market share during the quarter with Getbucks now having four per cent market share, Amandla 13 per cent market share and Eswatini Royal Insurance Corporation (ERIC) two per cent market share.

It was noted that the credit institutions industry was not considered a competitive marketplace as it was highly concentrated with few bigger players and a Herfindahl Hirschman Index (HHI) score of 2671 confirming the level of concentration. It is worth noting that ESRIC holds a credit provider licence for the policy loans they advance to policyholders with life policies that provide for loans to be advanced against their accumulated value.

It was also reported that debt extended by credit institutions and money lenders to households showed a slight growth of 0.5 per cent quarter on quarter and 13.1 per cent year-on-year to E3 billion from E2.7 billion mostly driven by long term loans and advances. As of December 2022, the value of credit institutions and retail outlets’ assets increased by 4.0 per cent on a quarter-on-quarter basis and by 9.9 per cent on a year-on-year basis. The assets of credit providers mostly made of loans and advances and amounts owing by related parties, which both contributes over 70 per cent of the total assets.

It was reported that the loan book for credit institutions including money lenders marginally declined by 0.1 per cent quarter on quarter and increase by 9.2 per cent year-on-year to E4.1 billion from E3.8 billion. Meanwhile, retail outlets’ loan book also increased by 15.1 per cent quarter-on-quarter and by 9.6 per cent year-on-year to E1.4 billion from E1.3 billion. Like in the preceding quarters, the increase in assets continues to be driven by deposits and short-term loans and advances. Retail outlets also experienced an increase of 5.9 per cent on a quarterly basis and a 5.6 per  cent increase on yearly basis. The low demand for credit usually mirrors a weak housing market amidst the high interest rates and inflation, especially when household incomes become uncertain.

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