Country Financial Sector Profilesback

Financial Sector Overview

Economic Landscape

The Republic of Seychelles is a small island country in East Africa, loacted north-east of Madagascar and has a population of approximately 96,000 inhabitants. It is a member of two (2) sub-regional organizations - the Southern African Development Community (SADC) and the Common Market for Eastern and Southern Africa (COMESA). Seychelles, which has been independent since 1976, is a fledgling democracy whose economic performance is driven mainly by dynamic tourism, fishing and Information Technology and Communication (ICT) industries. In 2018, the GDP reached USD 1.6 billion and economic growth averaged around 4.3% between 2014 and 2018. The Human Development Index (HDI) and the GDP per capita are among the highest in Africa, placing Seychelles in the category of upper middle-income economies. The literacy rate is also nearly 100%. However, Seychelles faces a shortage of skilled labour in certain sectors of economic activity, hence the importance of increasing investment in human capital in order to meet medium- and long-term growth challenges. Moreover, persistent economic inequality and the impact of climate change undermine efforts to boost inclusive and sustainable growth. The Seychelles government launched in 2018 the world’s first sovereign blue bonds, raising approximately USD 15 million to finance marine and fisheries projects. The country ranked 96th (out of 190 countries) in the Doing Business 2019 against the 95th in 2017 and is one of Africa’s top 10 economies for attractiveness of the business environment.

Overview of the Financial Sector

The Seychelles financial sector is essentially driven by commercial banks. These are generally overseen by the Central Bank of Seychelles (CBS). The Securities Exchange (MERJ Exchange Limited) was created in 2011 to boost the capital market. By 31 December 2017, other institutions were also contributing to the domestic financial sector, including the Seychelles Development Bank, a cooperative bank (Seychelles Credit Union), the Housing Finance Company, four insurance companies and 25 currency exchange offices. The local currency is the Seychelles Rupee (SCR).

According to the CBS’s 2018 financial stability report, the financial sector as a whole is threatened by the debt burden of state-owned enterprises; and the withdrawal of correspondent bank relationships in the domestic financial sector. Initiatives were taken by the Central Bank and other stakeholders in order to strengthen the overall governance framework of the financial sector and regulatory provisions to combat money laundering. Seychelles’ Financial Sector Development Implementation Plan (FSDIP) was approved in November 2014 by the government to establish a common roadmap aimed at strengthening the contribution of the financial sector to the country’s development.

Banking Sector

Structure of the banking market - At end-December 2018, the Seychelles banking market comprised eight banks including one engaged in offshore banking activities. The combined assets of the banking sector grew by 10% compared to 2017, reaching SCR 21.7 billion (USD 1.7 billion) and equivalent to 99% of GDP in the same year. The banking sector is still highly concentrated; the country’s three largest banks hold approximately 80% of sector assets, deposits and loans to the economy.

Structure of loans and deposits - Outstanding loans to the economy remained at a relatively stable level between 2017 and 2018 due the decline in bank lending to public institutions: they rose by only 0.1%, reaching SCR 11.9 billion (USD 0.93 billion) in 2018. Loans to the private sector have risen by 12% to SCR 696 million (USD 54.5 million). Households and non-profit organizations (23%), tourism (16%) and the construction sector constitute the primary contributors to domestic lending. Deposits collected, the main source of financing for domestic banks, amounted to SCR 18.5 billion (USD 1.04 billion) in 2018.

Financial strength of the banking sector - Despite the tightening of monetary policy in 2018, the domestic banking sector has been relatively healthy. The sector's total assets increased, credit risk decreased and profitability remained positive, despite a slight rise compared to 2017. Indeed, the sector's return on assets (ROA) and return on equity (ROE) were 3% and 29% respectively in 2018. The level of non-performing loans stood at 3.4% of the total credit portfolio, a 2.9% drop compared to 2017. The sector also had a capital adequacy ratio of 21% in 2018, well above the regulatory 12%. However, due to the liberalization of the foreign exchange market, domestic banks are increasingly exposed to currency risk incurred by the volume of loans granted in foreign currency which represented on average over 20% of the domestic credit portfolio between 2014 and 2018.

Financial Inclusion

According to Insight2Impact data, the financial inclusion rate, measured by the number of people holding a bank account, stood at 94% in 2016. 70% of the population held an account in a non-bank financial institution and only 2.8% of the population was excluded from the formal financial system. With the support of the African Development Bank (AfDB), the CBS and the Financial Services Authority (FSA) conducted a national study in 2016 on financial literacy leading to the adoption of a national financial education strategy from 2017 to 2020. The objective of this strategy is to improve the financial capacities of the population and to encourage responsible financial behaviour. It targets four population groups: adults working in the formal sector, SME owners and employees, young people and economically vulnerable populations.

SME Financing

In 2016, a national survey was also launched to identify the challenges that SMEs face in their development. The survey showed that SMEs suffer from a limited supply of financing, and a dearth of non-financial support measures and skilled human resources. They also face crippling financing costs and considerable administrative delays in accessing credit. Measures are being implemented by the central bank, in collaboration with commercial banks, the World Bank and domestic financial institutions. These measures include, in addition to special SME loan programmes, provisions aimed at strengthening the national system of credit by integrating unregulated financial organizations, including agencies specializing in the promotion of entrepreneurship. According to CBS’s 2018 data, 42% of local SMEs obtain financing from the Seychelles Development Bank (SDB) which applies preferential interest rates. Of these, 15% use commercial banks and 43% are financed through grants and from agencies specialising in support for SMEs.

Insurance Sector

At the end of 2018, the Seychelles insurance sector consisted of 14 insurance companies, compared to 13 in 2017, including six local companies and eight foreign-owned companies. The sector is regulated and supervised by the Financial Services Authority (FSA). It is also led by 16 brokers, 40 insurance agents and two insurance company representatives. The insurance penetration rate in the country was 2.4% in 2014, while the total premiums collected and the insurance density in the country reached USD 21 million and USD 230 million respectively. In recent years, the domestic insurance sector has increased its investment exposure to the real estate sector: In fact, 45% of insurance companies' investments are, in fact, devoted to real estate and land, while 18% are invested in term deposits, 7% as current deposits, 13% in loans and 11% in public securities.

Capital Markets

The local stock exchange, MERJ Exchange Limited, formerly Trop-X (Seychelles) Limited, was established in 2011. It only became operational in 2013 with the IPO of a local firm. At end-July 2019, 31 companies were listed on the three segments of the equity market. The overall market capitalization reached USD 330 million, or 21% of 2018 GDP. In 2019, MERJ Exchange Limited became one of the first exchanges in the world, and the first in Africa, to authorize securities transactions based on Blockchain technology, thereby opening its market to international investors attracted by this specific innovation.

Social Security System

The Seychelles pension system is based on the Seychelles Pension Fund (SPF), the public body responsible for managing the national pay-as-you-go pension system. The SPF covers both private-sector workers and civil servants, entrepreneurs, informal economic actors and part-time workers. At end-2018, the SPF’s total assets amounted to SCR 3 billion (USD 234.9 million), equivalent to 15% of GDP in the same year. The SPF plays a strategic role in the Seychelles economy because of its size: it is the country’s largest institutional investor. It is also important for the financial sector as a whole because of its investments in government treasury bills and bonds, publicly traded securities and bank deposits. Its investment portfolio in 2018 was divided as follows: real estate (50%), fixed-income debt securities (28%), corporate equities (19%) and cash (3%).

The low diversification of its investment portfolio and the high exposure to real estate prompted the SPF to revise its investment strategy in 2017, in order to prioritize investments in equities and bonds while exploring options in liquid foreign financial markets. Finally, the rising life expectancy and declining birth rates in the country pose long-term challenges to the sustainability of the current pay-as-you-go system.










P. O. Box 167

(+248) 4383838



P. O. Box 122

(+248) 4284555



P. O. Box 124

(+248) 4618000



Capital City Bldg, Independance Avenue
PO Box 672

(+248) 438 56 00



Mangliers Street, Cooperative House, Huteau Lane
PO Box 342

(+248) 429 01 90



P. O. Box 702

(+248) 4224371



P. O. Box 241

(+248) 4293000



P. O. Box 531

(+248) 4294000



P. O. Box 672

(+248) 4385600



P.O. Box 1599
Oliaji Trade Centre, Francis Rachel Street,

(+248) 4611888



P.O. Box 1010
2-07 Capital City Building, Independence Avenue

(+248) 4410040




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At a Glance

At a Glance Source
Population in thousands (2019): 97.62
GDP per capita (current US$) 2019 - World Average 10,721.61: 17401.72
Account (%) age 15+) - (2014 vs 2017): n/a
Agriculture Orientation Index - Credit ( Agriculture, Forestry and Fisheries share of GDP) (2015 vs 2016): 1.43 | 1.75
Financial Inclusion Strategies: SADC Financial Inclusion Strategy 2016-2021
Domestic credit provided by financial sector (% of GDP) 2017: 44.11
Made or received digital payments in the past year (% age 15+) (2014 vs 2017): n/a
Remittances % of GDP for 2017: 0.014
Mortgage Interest Rate / Mortgage Term (years): 11% | 20

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