BY: SIBUSISO MNGADI | EDITOR-IN-CHIEF
Agriculture and forestry recorded the fastest credit growth of any sector in the Eswatini economy in May 2026, with bank lending to the sector rising 12.9 per cent in a single month, the Central Bank of Eswatini has reported.
The figure, published in the Bank’s Monthly Statistical Release for May/June 2026, placed agriculture ahead of construction (11.4 per cent), distribution and tourism (6.9 per cent) and manufacturing (0.2 per cent) — a clear signal that commercial banks are increasingly willing to put money behind farming enterprises.
In plain terms: of all the industries in the country, agriculture attracted the strongest growth in new bank lending during the month.
What the numbers say
Total credit extended to the private sector reached E23.9 billion in May 2026, up 2.5 per cent from April and 10.6 per cent higher than a year earlier, the Central Bank said. Of this, businesses accounted for E13.2 billion, with agriculture and forestry the standout driver of the increase.
For farmers weighing the cost of borrowing, lending rates held steady. The commercial banks’ prime lending rate remained at 10.25 per cent in June 2026, while the Central Bank’s discount rate was unchanged at 6.75 per cent. A farmer borrowing E100,000 at prime would therefore pay roughly E10,250 in interest over a year, before fees.
Big players borrowing, smaller farmers squeezed
The growth, however, was not evenly shared. Credit to large enterprises rose 7.3 per cent month-on-month to E9.0 billion — 68.5 per cent of all business lending — while credit to small and medium enterprises (SMEs) fell 4.7 per cent over the same month.
The pattern suggests that much of the new agricultural lending is flowing to large agro-industrial operations rather than smallholder and emerging farmers. The longer-term trend is more encouraging: SME credit was still 11.6 per cent higher than a year earlier.
Household borrowing also continued to climb. Credit to households rose 1.9 per cent to E9.8 billion, led by unsecured personal loans, which jumped 4.0 per cent to E4.1 billion — a category many small-scale farmers rely on to finance inputs when formal agricultural credit is out of reach.
A thinner cushion for imports
The report also carried a caution. The country’s gross official reserves fell 7.2 per cent to E8.1 billion in June 2026, with import cover slipping from 2.0 months to 1.9 months — below the three months generally considered a safe buffer.
The Central Bank attributed the decline to net Rand outflows from trades with local banks and the settlement of Government fiscal obligations during the month.
For the agricultural sector, which depends heavily on imported fertiliser, fuel, seed and machinery, a thinner reserves cushion is worth watching. Should pressure on reserves persist, the cost and availability of imported inputs could be affected.
The bottom line for farmers
The May/June figures paint a picture of a banking sector that is warming to agriculture — but on terms that currently favour scale. For established agribusinesses, the lending environment is opening up. For smallholders and SMEs, the month-on-month dip in credit is a reminder that access to affordable finance remains the sector’s persistent gap, even as the overall numbers move in the right direction.
Source: Central Bank of Eswatini, Monthly Statistical Release, May/June 2026.
