SMALL-SCALE LOAN GUARANTEE SCHEME SURPASSES TARGET

MBABANE – The Small-Scale Enterprise Loan Guarantee Scheme surpassed its leverage ratio target of 3.0 times, as it increased from 2.41 times in March 2023, to 3.24 times at the end of March 2024.The Governor of the Central Bank of  Eswatini (CBE), Dr Phil Mnisi, said this indicated an increase of 34.44 per cent during the year. He said the current challenge within the Development Finance Schemes is the stagnancy of the Export Credit Guarantee Scheme (ECGS).

Strategic

He said in this regard, various strategic initiatives were being undertaken by the bank in trying to enhance uptake of the ECGS and one of them was the ‘Developing of Risk Instruments to Support Effective Lending to Specific Key Sectors.’Dr Mnisi said in advancing its financial inclusion agenda in partnership and collaboration with various stakeholders, the CBE ensures that it continues implementing a sound regulatory framework, which allows innovation and expansion of outreach programmes while providing mechanisms for managing risks associated with such activities.

Ensuring

He said the programmes include adequate financial consumer protection and market conduct, as well as financial policies that are not gender neutral among others, while ensuring that the right balance between financial inclusion objectives and financial stability is maintained. He added that to enhance financial inclusion, data availability is crucial in order to facilitate the design and rollout of quality financial products and services to the beneficiaries. He said thus, CBE, in collaboration with other stakeholders, advocates and implements data-driven and evidence-based policy formulation; in particular supporting women and youth financial inclusion, forcibly displaced people (FDP), enhancing digital finance infrastructure in fostering inclusion, Financial literacy to deepen financial inclusion, inclusive green finance within Eswatini - in line with the ongoing Greening the CBE project, among others.
Meanwhile, Eswatini is tackling climate change on both national and sub-national levels.

Plan

Dr Mnisi said government had a long-term plan (Climate Action Vision 2050) to address climate impacts, while the Central Bank, in partnership with the UNDP, has launched ‘The Greening of the Central Bank of Eswatini Project’ to make the financial system more environmentally friendly. He said this project will focus on managing climate risks for the Bank, creating a green finance system and exploring options like green bonds and carbon credit, formulating regulatory framework underpinned by environmental, social and governance (ESG) principles for sustainable banking practice, among others.

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