23 May 2024
By: Lebogang Mashala
Last week at Nampo, Land Bank CEO Themba Rikhotso told farmers the institution was regaining its former status as the preferred agricultural financier.
Rikhotso said the bank was well on its way to reclaiming its position as the leading development finance institution in the agricultural sector. This was due to the successful implementation of a turnaround strategy formulated by the board, he said.
The CEO was speaking at Land Bank’s stakeholder engagement event at Nampo under the theme, “Land Bank’s blended finance blueprint for the next crop of farmers”.
He attributed the bank’s improved performance, including a quicker turnaround in approving and disbursing loans, to a strategy that involved a complete overhaul of operations, processes and policies.
Between April 2023 and the end of March 2024, the bank had approved 154 applications worth a total of R980 million and had already disbursed R710 million to 99 farmers, he said.
Rikhotso explained that most of the approved applications were for a 50/50 split of loans and grants. He said the bank is processing applications worth R2 billion and had observed a high demand for blended finance.
According to Rikhotso, the Land Bank has been putting a lot of effort into improving its processes, particularly in reducing the time it takes to process applications. In one instance, an application had been finalised in just 48 hours, he said, attributing this to the farmer’s understanding and timely submission of required documentation.
Such quick turnarounds were rare, however, but progress had been made in shortening the average turnaround time, which was 35 days from application receipt to approval last year.
Rikhotso commended the board for implementing a new strategy with five key elements. The most important was the revision of the bank’s funding model to ensure proper funding and support for its developmental role. He also highlighted the expansion of the loan book and opportunities to combine grant funding with loans (blended finance).
The Land Bank CEO was speaking to stakeholders, particularly provincial departments, to maximise the use of available grants at the provincial level in combination with loans offered by the bank.
Other strategic steps included examining the bank’s commercial funding to generate more revenue through interest income; enhancing the bank’s delivery model through strategic partnerships; and strengthening credit risk management. “We have also looked at how to decentralise our credit processes so that we empower our provinces to make credit decisions.”
Rikhotso said the board had approved a new operating model and organisational restructure to help the institution improve on the execution of its mandate.
“We have had some discussions regarding our debt restructure, which we call the liability solution, and have made significant progress. We expect to make an announcement soon that it has been concluded, and we can now start operating out of default,” he said.
