Times Of Swaziland: ‘EMASWATI SHOULD BE CAUTIOUS WHEN INVESTING’

‘EMASWATI SHOULD BE CAUTIOUS WHEN INVESTING’
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Ntombi Mhlongo on 01/10/2023 16:13:00


EZULWINI – “If anyone offers you fantastic returns for investing your money,
you must first understand where they are coming from.”
This is advice that was shared by First National Bank (FNB) Eswatini Chief
Executive Dennis Mbingo, when stating his opinion about the many incidents where
emaSwati have lost millions of Emalangeni after investing in different entities
outside banks. This happened during a session the bank had with the media where
the annual financial statements for the year ended June 30, 2023 were presented.
Even though no name of entities was mentioned during the session, it is a known
fact that over 1 000 emaSwati lost millions of money after investing in certain
entities. They include those who invested about E340 million into Ecsponent and
others who lost E22 million in Sharemax. Responding to a question posed by the
Nation Magazine Editor Bheki Makhubu,  on why most emaSwati fall into the trap
of investing their money, mostly pension, into bogus schemes, Mbingo first
explained that there is always a hunt for value, but that there has been less
education on financial management.
necessarily
He mentioned that the education on financial management was not necessarily
supposed to be conducted by banks alone but that it needed to be a national
agenda. “You do not teach people basics around financial management just
because they are planning to pursue a course in Bachelor of Commerce. The truth
is that a nurse needs to understand how to handle finances. A farmer needs to
understand finances and that is how we should live,” Mbingo said. Elaborating,
he said there was a gap currently and that it has coincided with a lingo or
narrative in recent years to the effect that banks are vultures and hyenas.
“This has been related to issues such as bank charges and other things and
there wasn’t enough counter arguments around how to properly understand that
there are a few entities that can be trusted outside banks. This is because the
money that banks pay for any misconduct or non-compliance is substantial. In
some instances it comes with the legal arrest of the bank executives,” he
said.
As a result, he said, banks always try their best to be as accountable as
possible. “My view is that certain sectors in this business do not have such
strict regulations. So if people put their money there, they are putting
themselves at 100 per cent risk. To summarise it, I can safely say that we need
financial education at a national level. Secondly, banks have to be proactive in
talking about who they are and why they should be trusted. Thirdly, regulation
and accountability need to be intensified,” Mbingo emphasized. Expanding on
how to be cautious, he said every liSwati should make sure that if anyone
offered them 50 per cent returns if they invest their money when they are used
to perhaps 10 per cent, they should conduct a serious interrogation.
Mbingo also addressed a concern regarding the proposed changes in making
deposits intended for accounts outside the country. It was brought to his
attention that FNB Eswatini notified its customers about changes in making
international transactions. “In May we received messages that FNB will
introduce what is known as global payments and that soon clients will not be
able to make deposits to Namibia, South Africa and Lesotho while Botswana is not
there. When you purchase at Edgars and you have an account, you pay to an
account in South Africa. What is going to happen with that?” asked Makhubu.
The editor said for years, FNB has been the chosen financial institution,
especially for parents who have their children attending school outside the
country. “Even people who bank in other banks rely on FNB bankers and request
to use their accounts to deposit money to their children in South Africa. Will
all that be eliminated? Does that all get eliminated,” Makhubu asked and
further relayed his fear that such will have an impact on what FNB has been to
the lives of emaSwati for years.
response
In response, Mbingo explained that regulators in the whole SADC region were
seeking visibility. He said FNB Eswatini has to enforce what regulators in the
region proposed because the common monetary area was built around certain
principles and was a big value addition to the economies in the region. “You
do not see Botswana because it is not part of the common monetary area. The way
we have approached it is that if the sender or receiver of the funds have the
information about their identity and address properly laid out in what is known
as KYC (know your customer), a lot of risks are mitigated. The current model we
are running was not built for that level of visibility. So, we are redirecting
the flow to global payments because they incorporate all the additional
information that regulators want to see,” Mbingo explained.