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25 March 2024

Eswatini’s Fintech industry “a gateway to formal banking” says Central Bank Deputy Governor


From 20-23 May, AFI’s Working Groups will be meeting in Mbabane, Eswatini to discuss digital financial services, global standards and proportionality and financial inclusion strategies. Deputy Governor of the Central Bank of Eswatini, Felicia Dlamini-Kunene gives us her take on the country’s growing FinTech industry and its impact on financial inclusion.



How do you view FinTech’s potential to boost financial inclusion in Eswatini?

Physically walking into a bank is an intimidating experience, especially for someone who’s never banked before. It can unleash an avalanche of uncertainty for first-time customers: What will be expected of me? Do I have the “right profile”? Can I fulfill all the requirements? The real appeal of Fintech is that it offers a discreet, private experience of banking that suits more sensitive sectors of society. Transactions can be performed from the comfort of your couch, with no expectation. Not to mention, it is cost-effective and easy to use.

This unintimidating quality is what makes Fintech such a perfect launchpad for traditional banking. It allows users to build confidence in the financial system and become familiar with their own banking needs, before setting foot inside a bank. And this is not just theory… in Eswatini we’re seeing how Fintech uptake leads to an increase in formal banking.

Where is Eswatini now in terms of building an inclusive Fintech landscape?

Eswatini has an extensive mobile network and electricity coverage – one of the best in Africa. This has been key to the country’s fast-expanding Fintech industry. 85 percent of the country has access to electricity, compared to the 40-45 percent continental average.

At the Central Bank, we realize the value of investing in emerging talent. In 2019 we launched a Fintech Sandbox where startups can test their innovations in a safe environment, gaining confidence in their products before breaking into the Fintech market. We host regular Fintech hackathons in partnership with the Royal Eswatini Technology Park, where college students are invited to innovate Fintech solutions to real-life financial inclusion issues.

CBE’s support of emerging Fintech talent is meant to trigger investor interest. But it has also translated into sectoral competition, with traditional banks becoming more innovative and relaxing policies to accommodate lower-income sectors of the population.

Two major projects in the pipeline include the development of a digital identification (ID) system and a national payment switch – both should boost access and interoperability between customers, FinTechs and the wider payment ecosystem.


What are some of the challenges the country is facing in forging inclusive Fintech?

Eswatini has a population of just over one million. The small customer base scares off investors who fear little or no returns on their investments, even though experience proves the opposite.

For example, in the late 90s, MTN – Africa’s largest mobile operator – wanted to enter the Eswatini market. Given our population size, with a little over 100,000 people formally employed, they estimated it would take them at least six years to break even and four more to start making a profit. We thought they were underestimating market demand, and we were correct. Employed individuals wanted to connect with their extended family members back home, expanding the market threefold.

MTN broke even under 3 years and has been profitable ever since. In fact, MTN was responsible for rolling out the mobile network infrastructure which Eswatini’s FinTechs rely on today.

It’s still a challenge to attract investors, but we are confident that our support of the Fintech industry will lead to growing investor confidence in the long run.


How has Fintech aided financial inclusion in the country?

Fintech has had a tremendous impact on our financial inclusion landscape. In 2011, only 6 percent of the population was making use of Fintech (and other non-banking financial services). By 2018 that number had shot up to 33 percent. In that same period, the percentage of financially excluded more than halved, dropping from 37 percent in 2011 to a mere 15 percent in 2018.

Increased Fintech uptake also spilled over into the formal banking sector, leading to a 6 percent user increase between 2011 and 2018.


What advice would you give to other AFI members looking to boost inclusive fintech?

  • Fintech depends on network and electricity coverage. Unfortunately, connectivity infrastructure is still far from perfect in many places. Once the world wakes up to the unparalleled potential of Fintech in emerging markets, infrastructure investment will hopefully start flowing in.

  • Collaboration and coordination are critical. The CBE works alongside the Eswatini Ministry of Finance, the Center for Financial Inclusion, the Royal Technology Park, telecommunications companies, and non-bank regulators to ensure that FinTech policymaking is harmonized across various sectors. We also set up dedicated Fintech and Financial Inclusion Units to centralize research and advocacy efforts, and coordinate results.

  • AFI’s peer learning platform was an invaluable resource that helped us lay the groundwork for our Fintech ambitions. It allowed us to share ideas with, and learn from, members who already had established Fintech industries. Feel free to look through our recently published Eswatini Fintech Landscape Report, a product of AFI’s in country implementation program.


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