Financial Sector Development Implementation Plan in Swaziland
Project Development Objective (PDO)
The objective of the project is to develop a Financial Sector Development Implementation Plan (FSDIP) with a view to introducing reforms in the financial sector in Swaziland and, in particular, to aligning policies and legislation to meet the changing structure of the sector.
Financial stability continues to be a high priority given the integration with the South Africa’s financial sector. Given the small size and unique elements of the financial sector in Swaziland, the proposed FSDIP will provide a targeted approach to development. It will focus on three core challenges: (a) maintaining financial stability given Swaziland’s integration with South Africa; (b) bringing safe and prudent financial products and services to a greater number of the poor and underserved; and (c) fostering a more diverse range of financial products, particularly those that mitigate a wide range of risks for households, small and medium enterprises (SMEs), and agricultural producers.
The main output of the project is an FSDIP that will propose a focused, coherent, sequenced, and implementation-focused set of policies and strategic advice for the targeted development of the financial sector in Swaziland. The FSDIP will identify priority areas of intervention. In doing so, it will keep in mind Swaziland’s pressing necessity to address vulnerabilities because of its small-scaled and land-locked economy, with a view to contributing to the economy’s growth. The FSDIP will complement several ongoing activities including the following:
1. Prepare a stocktaking report of completed and ongoing work in the financial sector and
additional analysis and substudies of other activities including the following:
• Legal framework. Assess the current laws and regulations for the financial sector,
note any areas of conflict and means to harmonize the legal framework, and
recommend laws and regulations.
• Crisis management. Review the tools for intervention, monitoring, and enforcement
in response to distress in the financial system, such as (a) contingency planning
and crisis management frameworks and (b) deposit insurance arrangements.
• Access to finance. Assess the landscape with a particular focus on access to
finance for poor households; for women; for micro, small, and medium enterprises;
and for agricultural areas. The review may cover (a) the effect of CBS (Central
Bank of Swaziland) stimulus packages for promoting lending to SMEs, (b) the
potential role of improved credit infrastructure, (c) the effect of increasing
financial literacy through media and education, and (d) the opportunities available
to encourage product diversification in microinsurance, agricultural finance, and SME
2. Draft an FSDIP and conduct an internal workshop to produce a medium-term strategic plan to
develop the financial sector and to prioritize and budget a roadmap for interventions that
will constitute a locally owned comprehensive strategy.
3. Mobilize support and financial resources to empower and involve the stakeholders in finalizing
and implementing the FSDIP. Three to four workshops or seminars (under activities 2 and 3) will
be organized to consult on the FSDIP and disseminate information. Those attending the
workshops will be relevant regulatory and supervisory bodies, other relevant ministries, private
sector representatives, and donors.
The FSDIP will provide the government of Swaziland, as well as all the relevant public and private stakeholders, with a set of clear roadmaps in key policy areas for financial sector development. These roadmaps will be included in a unified and well-sequenced implementation plan and will improve coordination between authorities.