MBABANE – The Central Bank of Eswatini (CBE) has sounded a strong warning to households heading into 2026.
The bank is cautioning that rising over-indebtedness among emaSwati is emerging as a growing financial and social risk that could undermine household welfare and broader economic stability.
In a public advisory urging citizens to ‘start with financial freedom’, the bank noted that many workers are increasingly finding their salaries depleted by stop orders before month-end, a clear indicator that debt obligations have overtaken disposable income.
According to the CBE, this pattern reflects over–indebtedness – a situation where households rely on new borrowing simply to survive, rather than to build assets or improve long-term financial security.
“Is your salary disappearing before you even touch it? Many emaSwati feel they are working solely for stop orders as debt swallows their paychecks,” the bank warned, adding that the consequences go far beyond empty pockets.
The CBE highlighted that excessive debt is closely linked to stress, anxiety, depression and other serious health risks, making it both a financial and social concern.
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… credit to households grew in 2024/25
MBABANE – According to the review, credit to households continued to grow during 2024/25, driven largely by motor vehicle loans and unsecured lending.
Although the debt-service-to-income ratio declined to about 33.6 per cent – suggesting that, on average, households are spending a slightly smaller share of income servicing debt – the overall level of indebtedness remains high by historical standards.
The bank noted that this points to a prolonged deleveraging phase, where households are struggling to meaningfully reduce outstanding obligations.In his remarks when presenting the financial stability report late last year, the CBE Governor, Dr Phil Mnisi, indicated that overall household indebtedness declined from 76.8 to 74.1 per cent of income, yet disposable income as a share of GDP declined from 23.3 to 19.6 per cent, reducing financial buffers.
Household credit-to-GDP also fell from 15 to 14.5 per cent, widening the credit-to-GDP gap to 14.1 per cent percentage points. While lower indebtedness helps ease systemic risk, it simultaneously constrains domestic demand and limits potential economic growth.
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… excessive debt poses risks to wider economy
MBABANE – The CBE cautioned that excessive household debt does not only affect individual families, but can also pose risks to financial institutions and the wider economy.
Highly indebted households are more likely to default during economic downturns, contributing to rising non-performing loans and weakening bank profitability.
The review already shows a modest increase in non-performing loans across the banking sector, underscoring the importance of containing credit risks at the household level. Against this backdrop, the Central Bank has urged emaSwati to adopt practical financial resolutions as they enter 2026.
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