By Jasper Raats
Emerging macadamia farmers face a long and costly road to success, often hindered by a lack of capital, collateral, and business support. Business leaders from the Land Bank, Old Mutual and the SAB Foundation shared practical tools, funding models, and advice to help farmers bridge the finance gap and grow resilient businesses at Samac’s recent transformation summit in Centurion.
Facilitated by Samac’s transformation manager, Lebogang Mbana, the session unpacked how collaboration between funders, government and farmer support organisations is reshaping access to finance for black and emerging farmers.
Blended finance, creative collateral and mentorship
Themba Rikhotso, CEO of the Land Bank, outlined several support mechanisms:
- Blended finance: A model where government grants are combined with concessional loans. Over R3 billion in funding has reached 390 black farmers in the past 24 months, supported by the Department of Agriculture.
- Agro-Energy Fund: A R1.2 billion initiative to support farmers in transitioning to renewable energy, combining R500 million in grants with R700 million in loans.
- Flexible collateral structures: Contrary to popular belief, lack of title deeds isn’t a dead end. Land Bank accepts biological assets (like macadamia orchards), farming equipment, and PTO land as alternative forms of security.
- Skills support: Business plan assistance, compliance guidance, and post-funding mentorship are embedded in loan processes. Every approved project includes a mentor to bridge technical and business skills gaps.
“Bankers don’t finance security – they finance cashflow,” Rikhotso said. “A project must prove it can generate enough income to repay the loan.”
Early-stage grants and building agribusiness ecosystems
Bridgit Evans, executive director of the SAB Foundation, shared insights from a R30 million investment into a macadamia hub involving 12 smallholder farmers:
- Grants, not loans (at first): Given the 7-year wait for macadamia trees to yield returns, the SAB Foundation opted for grant funding to reduce risk and build foundational capacity.
- Farmer-led vision: The programme’s success was rooted in the leadership of Gene Likhanya, a local farmer with a vision to support his community. “We looked for farmers who had already started something,” said Evans.
- Diversified income streams: Interim income through crops like tomatoes, honey, and cabbages helped sustain farmers until trees matured.
- Wraparound support: Business training, financial literacy, mentoring, and coaching were crucial. Farmers were required to report regularly, resulting in high success and business survival rates.
“Don’t pour water into a leaking bucket. Funding without support doesn’t work,” Evans said.
Flexible investment structures
Tebogo Mokgoadi, Senior Investment Associate at Old Mutual’s Masisizane Fund, highlighted the importance of tailored funding instruments:
- Beyond collateral: Old Mutual prioritises impact and sustainability over traditional balance-sheet strength.
- Alternative finance models: Equity-based investments, patient capital, and concessionary finance instruments are better suited to long-gestation crops like macadamias.
- Bridging the knowledge gap: Many farmers struggle with business readiness – not necessarily due to a lack of potential, but a lack of understanding of funder requirements.
“There’s a misalignment between funders and farmers. We need better translation of farmer visions into fundable business plans,” Mokgoadi noted.
Practical tips
- Confidence is key: “If you can sell it, people will listen,” said Evans. Many opportunities begin with the courage to ask.
- Cashflow matters most: Build a business model that shows repayment ability – not just a good idea.
- Get investment-ready: Understand what type of funding is right for your stage (grant, loan, equity), and tailor your application accordingly.
- Avoid multiple lenders (initially): For small farmers, spreading obligations across several funders creates compliance headaches. Start with one.
- Know your audience: Don’t copy-paste business plans. Funders have different mandates – understand each one before applying.
- Use mentorship and support services: Organisations like SAMAC, Land Bank and SAB Foundation offer technical support. Use it to strengthen your pitch.
All panellists agreed that institutions need to stop duplicating efforts and instead build integrated support systems around farmers.
Finance remains a significant barrier – but as this panel showed, it’s no longer an insurmountable one. With the right tools, partnerships, and mindset, emerging farmers can unlock pathways to commercial success.
Also read:
From soil to success: How a macadamia farmer secured financial backing
