MBABANE – The non-banking financial institutions (NBFIs) have quietly built up a formidable war chest of E124 billion in assets.
This is a pool of domestic savings is what economists say could become a powerful engine for private sector-led growth if strategically deployed.
According to Economist Sanele Sibiya, the scale of asset accumulation within the NBFI sector signals both financial deepening and untapped opportunity.
“Overall, the NBFI assets valued at E124 billion constitute a significant savings pool which can be channelled towards productive sectors in the economy and grow the economy through these private investments,” Sibiya said. At a time when the kingdom is seeking sustainable growth driven by domestic enterprise rather than external borrowing, the growing weight of the non-bank financial sector presents a compelling case for rethinking how accumulated savings are invested. Of the E124 billion in total NBFI assets, retirement funds account for E58 billion, making them the single largest component of the sector.
Sibiya explained that this dominance reflects the structure of Eswatini’s labour market and savings framework.
“The fact that retirement funds account for E58 billion signals that the main way to mobilise savings in the kingdom outside the banking financial system is through retirement funds,” he said.
Most employees in the country are engaged either on fixed-term contracts or permanent employment arrangements, both of which are generally pensionable. In addition, workers without recognised occupational retirement schemes are required to contribute to a mandatory provident fund.
“As a result, it is expected that retirement funds will make up the bulk of the assets of non-banking financial institutions,” Sibiya noted. Interestingly, while there are 82 registered retirement funds compared to 127 savings and credit co-operative societies (SACCOs) and a number of insurance providers, retirement funds account for approximately 47 per cent of total NBFI assets.
This disproportionate share, Sibiya said, may be linked to regulatory frameworks and market structures that have shaped asset growth patterns over time.
The insurance sector was liberalised in 2006, while credit and savings co-operatives were brought under a clearer regulatory regime through the Cooperative Societies Act of 2003 and the Cooperative Societies Regulations of 2005. Since then, asset accumulation across the broader NBFI space has accelerated.
“The rate of growth of asset accumulation has been impressive, extending the sources of savings mobilisation in the kingdom to sources outside the formal banking system and the retirement funds conduit,” he said.
While the figures are substantial, Sibiya cautioned against misinterpreting them by conflating savings stocks with economic output flows. Asset accumulation within NBFIs is a stock concept — meaning it reflects savings built up over time. Gross Domestic Product (GDP), by contrast, is a flow concept, measuring the value of goods and services produced within a given year.
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