As the growing demand for payment solutions and affordable financial products took off worldwide, the Central Bank of Eswatini (CBE) rode on this wave and launched the Fintech Regulatory Sandbox in March 2019.

This launch was a fulfillment of the Bank’s mandate of creating a conducive environment for the development and adoption of financial technologies (Fintech) with the hope of improving access, efficiency, and affordability of financial services in the country.

With the CBE’s understanding of the growing importance of keeping up with and embracing emerging technologies, the Sandbox did not only prove to be a success but also motivated more startups in the Kingdom to submit and test the market.

Like any other Sandbox, the CBE has received applications from numerous startups. The Bank has gone further to admit a firm that has experimented their solution and serviced its customers on a small scale, for a limited time under close supervision.

WHAT IS A REGULATORY SANDBOX?

The regulatory Sandbox is simply a testing ground set up by a regulator (the CBE in this case) that allows Fintech startups and other innovators to conduct live experiments in a controlled environment under the regulator’s supervision.

WHO QUALIFIES TO APPLY?

The regulator Sandbox is open to Fintech startups, established financial institutions, and other businesses developing new and innovative financial services, products, and business models currently not covered or hindered by regulatory requirements.

The figure below depicts the sandbox application, approval and participation process. However, the exact journey and the CBE’s involvement depends on the solution being tested, the testing options, and the regulatory status of the company and the extent of consumer involvement.

WHAT HAPPENS DURING SANDBOX TESTING?

Evaluation

During the Sandbox testing period, the CBE may relax or waive some authorization requirements to allow the businesses to focus on their core offerings. Even though this may be so, some requirements may not be relaxed to protect against risks that may affect testing customers and other players in the market and the financial system at large. Requirements that may not be relaxed include; consumer protection, personal information privacy and confidentiality, and anti-money laundering and counter-terrorist financing (AML/CFT) laws.

MORE ON OUR FIRST REGULATORY SANDBOX FIRM

The first Fintech start-up to be admitted to the CBE Sandbox in December 2020 was Digi-image Investments (S@lvTec). The Digi-image admitted solution is ePayNet, a mobile app offering payments, funds transfer and bulk payments solutions.

Digi-image’s payment solution includes processing payments such as school fees, giving (church, individuals & NGOs) and utility bills payment using funds in a Mobile Money wallet or bank account. The funds transfer solution allows consumers to move money from their bank accounts using bank channels to any Mobile Money subscriber at a reduced cost. Lastly, the bulk payment solution allows the payment of salaries and disbursement of small loans to Mobile Money subscribers. Collections from Mobile Money subscribers is also possible through their stop-order module. Read more about Digi-image at www.salvtec.co.sz

SANDBOX GUIDELINES

Visit the CBE website to get more information on the CBE FinTech regulatory sandbox guidelines www.centralbank.org.sz/cbe-fintech-sandbox.

HOW TO APPLY

Download and complete the application form in the link provided above. Completed applications should be emailed to fintechsandbox@centralbank.org.sz with the subject “Application to the CBE FinTech Regulatory Sandbox.”If you have any questions about the Sandbox, please contact us at fintechsandbox@centralbank.org.sz