Private sector credit in Eswatini rose to E23.8 billion in July, but the bigger story is that business borrowing fell even as households kept taking more loans, underscoring a split in credit demand that matters for growth, investment and bank balance sheets.
Eswatini private sector credit rises to E23.8 billion
The Central Bank of Eswatini said total lending to the private sector increased 0.2% from June and 11.4% from a year earlier, driven largely by household borrowing and other sectors rather than firms. For investors and policymakers, that mix suggests consumer activity remains supported, but businesses — especially smaller ones — are not yet seeing a broad-based pickup in financing.
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Business credit slipped 0.1% month on month to E12.9 billion, though it was still 11.3% higher than a year ago. The weakness was concentrated in manufacturing, agriculture and forestry, construction, transport and communication, and real estate, pointing to softer appetite or tighter conditions across parts of the productive economy.
Manufacturing saw the steepest monthly drop at 3.7%, followed by agriculture and forestry at 1.2%. Construction declined 0.8%, while transport and communication and real estate each eased 0.3%. Offsetting some of that pressure, lending to community, social and personal services jumped 18%, mining and quarrying rose 4.1% and distribution and tourism gained 0.7%.
The sharpest strain was visible in small and medium-sized enterprises. SME credit fell 4.9% from June and 1.8% from a year earlier to E3.6 billion, while lending to large enterprises rose 1.9% month on month and 17.5% year on year to E9.2 billion. That gap matters because SMEs are typically the biggest source of job creation and local spending.
Household credit climbed to E10 billion, up 0.6% on the month and 14.4% year on year, helped by unsecured personal loans and motor vehicle finance. Other personal loans increased 1.3% to E4.2 billion and vehicle loans rose 0.6% to E1.5 billion, while housing loans were broadly flat at E4.3 billion.
The broader money supply also expanded, with M2 up 3.2% on the month and 12.5% on the year to E28.5 billion. Narrow money rose 5.2% month on month to E10.7 billion, supported by more cash in circulation and higher demand deposits, while quasi-money climbed 2% to E17.9 billion.
Even so, banking liquidity eased slightly. Domestic liquid assets fell 1.1% on the month to E8.6 billion and the liquidity ratio slipped to 31.2% from 32% in June. That points to some tightening at the margin even as credit and deposits continue to grow.
The external position improved in August, with gross official reserves rising 3.9% to E10.4 billion and import cover edging up to 2.4 months from 2.3 months. For markets, the near-term focus is whether the household-led credit expansion can support activity without being offset by weaker business and SME lending, which remains the cleaner read-through for investment and employment.
| Entity | Gains | Losses |
|---|---|---|
| Households | ▲Easier access to credit | ▼Higher debt burden |
| Large enterprises | ▲Rising loan balances | ▼None in July |
| SMEs | ▲Limited, selective lending | ▼Falling credit access |
| Banks | ▲Loan growth and deposit expansion | ▼Slightly tighter liquidity |
