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1 Swaziland
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Swaziland
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Presentation on the Financial Sector in
Swaziland
• Introduction – Swaziland
• Major Economic Factors
• The Structure of the Financial sector
• The Legal Framework
• Challenges
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Introduction
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Introduction
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King Mswati III
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King Mswati III
Born 19 April 1968 (1968-
04-19) (age 42)
Reign 25 April 1986 –
presentwives 14 wives concurrently
children 24 children
Father King Sobhuza II
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The Flag
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Other Monarchies
• Bahrain · Belgium · Bhutan · Brunei ·
Cambodia · Commonwealth realms ·
Denmark · Japan · Jordan · Kuwait ·
Lesotho · Liechtenstein · Luxembourg ·
Malaysia · Monaco · Morocco ·
Netherlands · Norway · Oman · Qatar ·
Saudi Arabia · Spain · Swaziland ·
Sweden · Thailand · Tonga
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Major Economic Indicators
Nominal GDP €' Million 2,872
Agric./GDP (%) - factor cost 8.38%
Manuf./GDP (%) - factor cost 27.48%
Population ('000) 1,046
Average inflation 4.5%
Exchange rate* (E/US Dollar) 7.33
Prime lending 9%
Discount rate 5.5%
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Major Economic Indicators
• Graphical Presentation of some of the indicators from 2003 to 2010
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Nominal and Real GDP
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Population
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Inflation
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Unemployment Rate
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Exchange Rate
The Structure of the Financial Sector
Ministry of Enterprise
Ministry of Finance
Ministry of Agriculture
Cooperatives
Other Micro/MacroFinance Org
CentralBank
CommercialBanks
Building SocietyFSA
Registrar of Ins. & Ret
Insurance
Pension F.
Credit Institutions
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The Structure of the Financial Sector
�Central Bank of Swaziland
� Monetary policy
� Regulating and supervising financial sector
� Issue and redeem currency
� Hold and manage foreign exchange reserves
� Development of efficient national payment
system
� Conducting research on monetary, economic
matters
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The Structure of the Financial Sector
�Registrar of Insurance and Pension Funds
� Insurance Companies
� Brokers and Agents
� Pension Funds
�Commissioner of Savings and Credit Co-
operatives
� Co-operative development
� Savings and Credit Co-operatives
The Structure of the Financial Sector
�Commercial Banks (3)
� Standard Bank Swaziland Limited
� First National Bank of Swaziland
� NedBank Swaziland Limited
�Swaziland Savings and (1) Development Bank
� Building Society (1)– Swaziland Building Society
� owned by the members
Owned by parent
Companies in
South Africa
Wholly owned by the
Swazi Government
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The Structure of the Financial Sector
�The Commercial Banks have:
� 31 Branches and 12 Agencies across Swaziland
� E5.9 billion Total loans issued
� E8.2 billion Total Deposits
� E10.7 billion Total Assets
� One Building Society with 5 branches
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Loans and Deposits
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The Structure of the Financial Sector
�Contractual Savings Institutions
�Swaziland National Provident Fund
• Compulsory life assurance for private sector
• From The SNPF Act, 1962
• Controls E300 million Total Assets
�Public Service Pension Fund
• For Civil servants since 1993
�Other smaller Pension and Provident Funds
• Estimated above 200 across the country
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The Structure of the Financial Sector
�Insurance Business � Two Insurance companies (SRIC) and Metropolitan
Insurance Company
� New Insurance Act, 2006 de-monopolizes the Insurance industry.
�Cooperatives� 50 registered co-ops with membership over 40,000.
� Total Savings over E400 million
� Total Loans issued over E300 million
� Accept deposits as savings, subject to certain conditions
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The Structure of the Financial Sector
�Other Financial institutions
� Inhlanyelo Development Fund
• Training and Consulting
• Loans
� Swaziland Development Finance Corporation
• finance and promote the development of Swazi-owned
Enterprises
• Over E300 million Assets
� Micro-lenders
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The Structure of the Financial Sector
�Swaziland Stock Exchange
�5 listed companies trading in equities
�Market capitalisation of close to E2 billion
�Relatively inactive
�Capital Markets
�3 Asset Management Companies
�Funds under management over E4.0 billion
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The Legal Framework
�Central Bank of Swaziland
�Financial Institutions Act, 2005
�Deposit taking institutions – Banks
�Building Societies Act, 1962
�Building Society
�Stock Exchange, Asset Management Companies
� Act, Legal Notices, Circulars and Guidelines
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The Legal Framework
�Registrar of Insurance and Pension Funds
�Insurance Act, 2005
� Insurance Agents, Insurance Brokers, Insurer
�Retirements Funds Act, 2005
� Retirement Fund, Trustee of a Retirement
Fund
�Act, Legal Notices, Regulations and Guidelines
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The Legal Framework
• Commissioner of Savings & Credit Co-ops
�Savings & Credit Co-operatives Act, 1962
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The Legal Framework
� The Financial Services Regulatory Authority Act
� The object of this Act is to establish an integrated
regulatory regime for the Swaziland non-bank
financial services industry including insurance,
retirement funds, savings and credit co-operatives,
building societies, capital markets and similar
institutions with sufficient powers to regulate and
supervise the sector effectively, including extensive
powers to issue byelaws, rules, codes etc;.
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Challenges
�Regulatory Framework and their Gaps
�Regulatory Structure and Gaps
�Legislative reforms
�Capacity and Training
�Pyramid schemes, ponzis (2.7 euros)
�Unregulated entities
�Financial exclusion
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Developments
�Securities Bill already submitted to parliament
�Financial Services Regulatory Authority Act
was operationalised in June 2010 and already
a Board of Directors has been appointed
�Central Bank of Swaziland playing a lead role
in all reforms
�Implementation of Risk Based Supervision –
Risk Based Supervision Guidelines issued
