By Delisa Thwala
Despite being a crucial pillar of Eswatini’s economy, micro, small, and medium enterprises (MSMEs) continue to face financial access challenges.
However, the 2023 Blended FinScope MSME Survey for Eswatini reveals a growing shift toward non-bank financial services, offering new opportunities for business growth.
Launched on February 27, the survey indicates that 84% of MSMEs now have access to formal financial products, up from 76% in 2017.
While reliance on non-bank formal services, such as Mobile Money, increased from 66% to 75%, access to traditional banking services dropped significantly from 69% to 52% over the same period.
The survey also highlights improvements in business formalization. The number of MSMEs holding operational licenses from the Ministry of Commerce, Industry and Trade or municipalities rose from 25% in 2017 to 43% in 2023.
Additionally, micro-entrepreneurs surged from 78% to 96%, signaling increased participation in the economy.
However, informality remains a challenge, with two-thirds of MSMEs still unregistered with the Registrar of Companies.
Unveiled by Minister of Finance, Hon. Neal Rijkenburg, alongside UNDP Resident Representative, Henrik Franklin, the report aimed to: Assess the scope and structure of MSMEs in Eswatini.
Examine trends in financial access both formal and informal since 2017.Identify key obstacles to MSME development, with a focus on financial services.
Explore barriers and drivers influencing financial inclusion. Addressing stakeholders from the finance, business, and policymaking sectors, Minister Rijkenberg called for collaborative efforts to address financial access challenges.
“Let us foster collaboration among stakeholders, advocate for policy changes, and invest in initiatives that prioritize MSME financial inclusion.
Together, we can create an environment where every entrepreneur, regardless of business size, can access financial services essential for success.” Said the Minister.
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The Centre for Financial Inclusion (CFI), under the Ministry of Finance, conducted a survey in partnership with FinMark Trust, with financial and technical backing from the SADC Secretariat, European Union, and UNDP.
Speaking at the launch, Franklin emphasized the survey’s expanded scope, which now includes enterprise-based insights alongside household-level data.
“This approach provides a deeper understanding of financial inclusion and the structure of informality in Eswatini. Such innovative collaborations are essential in accelerating progress.”
He also reaffirmed UNDP’s commitment to MSMEs, citing initiatives such as: The Eswatini National MSME Policy (2024-2029), developed in partnership with the Ministry of Commerce, Industry and Trade.
The Ingelo Local Certification Scheme, designed to enhance local MSME production capacity for domestic and international markets, including the African Continental Free Trade Area (AfCFTA).
Other key speakers at the event included CFI CEO Sizakele Dlamini, FinMark Trust CEO Brandan Pearce, and SADC Secretariat representative Mr. Rado Razafrindako.
With financial landscapes shifting, the report underscores the need for strategic reforms to ensure MSMEs have access to the resources they need for sustainable growth and competitiveness.
This version enhances clarity, structure, and readability while keeping the key details intact.
In hindsight, the UNDP-supported Blended FinScope MSME Survey for Eswatini 2023 is set to bring new Insights on MSME Financial Access in the country.
Access to finance remains a significant challenge for small businesses, but the survey’s findings, launched today, bring encouraging news.
84% of MSMEs now have formal financial products, up from 76% in 2017. The use of formal non-bank services, such as Mobile Money adoption, grew from 66% to 75%.
However, access to formal banking services dropped from 69% to 52%. The survey also highlights a rise in licensed businesses from 25% → 43% and micro-entrepreneurs (78% → 96%). Yet, two-thirds of MSMEs remain unregistered, posing challenges to sustainable growth.
Minister Neal Rijkenberg and UNDP Resident Representative Henrik Franklin emphasized the need for stronger collaboration, policy reforms, and financial inclusion efforts to unlock the full potential of MSMEs.
pending Financial Inclusion for MSMEs
Despite the decline in MSMEs’ access to traditional banking, experts suggest that the rise in alternative financial services presents an opportunity for inclusive growth.
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The increased adoption of Mobile Money and other digital financial services reflects a broader global trend where businesses and individuals are moving away from conventional banking due to accessibility, convenience, and cost factors.
The significant drop in MSMEs using formal banking services, from 69% in 2017 to 52% in 2023, raises concerns about the banking sector’s ability to cater to small businesses.
High transaction costs, stringent loan requirements, and limited physical access to banks particularly in rural areas are cited as key reasons behind this shift.
Additionally, many small businesses struggle to meet the collateral demands set by traditional banks, leading them to explore alternative financial solutions.
The increase in non-bank formal financial services usage (from 66% to 75%) indicates that MSMEs are finding new ways to manage their finances.
Mobile Money, in particular, has revolutionized financial transactions in Eswatini, allowing small business owners to make payments, receive funds, and access credit without the need for a traditional bank account.
Experts suggest that financial institutions should leverage this trend by developing hybrid solutions that integrate banking and mobile financial services.
While the increase in licensed businesses (from 25% to 43%) is encouraging, the fact that two-thirds of MSMEs remain unregistered limits their access to formal financial products.
Experts emphasize that improving financial literacy, streamlining business registration processes, and providing incentives for formalization will help more MSMEs integrate into the formal economy, unlocking greater access to funding and support programmes.
