KING URGES CBE TO CURB RECKLESS LENDING AMONG EMASWATI

EZULWINI – His Majesty King Mswati III has challenged the Central Bank of Eswatini (CBE) to give closer attention to its supervisory role for curbing reckless lending among emaSwati.

His Majesty made these remarks when addressing guests during the commemoration of the 50th anniversary of the cBe coupled with the blessing of the new site for the headquarters of the financial institution. The King noted with concern that many emaSwati were falling prey to unscrupulous lenders, who have plunged them deep into debt traps.  “Our commercial banks require scrutiny to avoid giving rise to numerous social challenges, exacerbating poverty and reversing the gains made towards financial inclusion for all. Responsible lending will ensure that every business and citizens are economically empowered to achieve financial gain and prosperity,” he said.

The King also encouraged the bank to work towards establishing an independent banking system for the country that has its own switch facility. “We believe that there are many investment opportunities in our financial and banking sectors. We wish to invite those who want to invest in this area to take advantage of the good financial environment that prevails in the kingdom,” the King urged. His Majesty pointed out that establishing an independent banking system for the country would bring more opportunities for the public and private sectors, including the ordinary emaSwati citizens as the country increase its monetary movement in all spheres.  

Crucial

His Majesty also acknowledged the crucial role played by the CBE in maintaining healthy national reserves, which gives the markets confidence in the nation’s ability to meet its external obligations. “Healthy reserves also reinforce the value of the domestic currency with external assets, helping government to address its foreign exchange requirements and external debt commitments,” he said.

The King also said the nation was appreciative of the CBE’s role in creating conducive environment that stimulates the development of various financial products like payment systems, savings, credit and insurance, among others. He noted that the various options and solutions have helped introduce many emaSwati, including the elderly (bogogo nabomkhulu) to simple digital financial services and platforms.

His Majesty also said he was happy to note that since its commissioning on April 1, 1974, the CBE, 50 years later, has acquitted itself very well.  “It has not only managed to maintain the high quality of the local currency, Lilangeni, which is not easily forged, it has also developed a banking system that matches international standards. As we look back at the milestones achieved by the bank over the past five decades, we have several reasons that make such a celebration worthwhile.”

The King said during this period, the bank has successfully carried out its key role of fostering price and financial stability. “It also provided sound financial advice across all seasons, which has contributed to Eswatini’s economic stability, despite globally depressed financial growth. This was more noticeable during the COVID-19 pandemic.”

The King highlighted that the banking sector plays an important role in the growth of the economy and national development by protecting depositor money and prudently using it to provide access to financing for the corporate sector while also meeting the needs of individual borrowers.  “We applaud you for the regulatory role and encourage all relevant entities to continue collaborating with the central bank to ensure that we build a strong and resilient economy by fostering successful businesses.”

Prudent

Adding, the King said: “In the same vein, we urge the institutions to always engage in prudent financial practices and market conduct. They must not jeopardise the country’s banking systems or the safety and security of depositors’ funds.” The King also recognised financial institutions in the country, making it clear that there would be no central bank without the various financial institutions in the kingdom.

He emphasised on the importance of the Central Bank, pointing out that this financial institution plays a pivotal role in maintaining macroeconomic stability and regulating the financial sector, among other functions. “The bank is also responsible for developing appropriate financial systems, institutions and policies to guard against illicit flows of money and money laundering. This is essential to protect the country as it trades with numerous countries around the world.”

The King said it was also imperative to safeguard the local banking system to build confidence in potential investors and trading partners. He urged the central bank to ensure that local systems are protected from external elements and cybercrime that could compromise the confidence and confidentiality of end users.  

“We also urge the bank to continue working closely with international multilateral institutions to strengthen our capacity and enhance institutional capabilities in providing sound financial advice to help the country implement effective economic strategies.” Speaking about the new headquarters for the central bank, the King shared that during the presentation of the master plan for this project, he was informed that the auxiliary buildings will include conference facilities, recreational facilities, financial services museum, innovation and centre of excellency to mention but a few. “We are pleased with this capital development as the new structure will change the landscape of the fast-developing area of Ezulwini Valley.”

The King also acknowledged the conference for governors from the Southern African Development Community (SADC) region as well as an alliance for financial inclusion meeting held earlier yesterday at the Royal Villas. He said the governors’ presence was proof of the CBE’s efforts to collaborate with like-minded institutions, from which best practices on effective implementation of monetary policy, financial stability and economic integration, which are essential for the growth and development of any sector, can be shared.

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