Land Bank disburses R20m in KZN, with R100m more in the pipeline

The Land and Agricultural Development Bank of South Africa (Land Bank) in KwaZulu-Natal has disbursed more than R20 million to farmers under the Blended Finance Scheme (BFS) since April, while conducting due diligence on applications worth a further R100 million in the current financial year. This comes after a total of R76 million was disbursed in the province in the 2024/25 financial year.

By Lebogang Mashala, editor at African Farming 

The figures were revealed by Sandile Ntamane, head of commercial and transformation banking for Land Bank in KwaZulu-Natal, during the African Farming Financial and Related Production Matters workshop held recently in Bergville. 

Ntamane emphasised that as a development-focused state-owned entity, Land Bank’s mandate is to ensure access to finance for all farmers, particularly those previously excluded from the industry. 

“We have the responsibility to finance all farmers, both commercial black and white farmers, but we also carry the responsibility to finance previously disadvantaged farmers and carry them through from smallholder to commercial level,” he said. 

He explained that the BFS is one of government’s interventions aimed at easing barriers to entry, especially for farmers without collateral, a strong balance sheet or owners’ contribution – requirements that usually hinder access to commercial loans. 

Farmers are classified into three categories based on annual turnover: 

• Smallholder producers (R50 000 – R1 million turnover): eligible for up to R15 million funding with a 60% grant/40% loan ratio. 
• Medium-commercial farmers (R1 million – R10 million turnover): eligible for up to R30 million with a 60/40 grant-loan ratio. 
• Commercial-scale farmers (R10 million+ turnover): eligible for up to R50 million with a 40% grant/60% loan ratio. 

Also read: How to access Land Bank’s farmer support programmes

Linking Farmers with Markets

To address challenges faced by farmers with limited land, Land Bank has begun piloting an aggregation framework in Jozini’s Makhathini community. The model groups farmers in the same area who grow the same crops. By pooling output, they can meet the R50 000 minimum turnover requirement and supply markets at scale. 

Such projects can receive up to R25 million, with a 60/40 grant-loan ratio. 

To support this, Land Bank has established a Partnerships and Ecosystems Development Unit to link farmers with markets. Partnerships have already been forged with Woolworths, Heineken, McCain Foods, Tiger Brands, Shoprite and Boxer. Farmers are free to use these or pursue their own markets. 

Ntamane stressed the importance of treating farming as a business, with risk management at the core. As part of this, 6% of all disbursed funds must go towards insurance cover. 

Funding can be used for inputs, machinery, land purchase or joint ventures, provided black farmers hold at least 50% ownership in such partnerships. 

Certain exclusions apply: Politicians, government employees, foreign nationals, politically exposed persons and distressed producers cannot access BFS funds. Farmers over the age of 60 must also provide a succession plan. 

Additionally, funded farmers are expected to implement a workers’ profit-sharing model of at least 10%. 

Also read: Land Bank launches Area-Yield Index Insurance for smallholder farmers

Driving agricultural transformation, job creation and food security

Although it is independent from the Department of Agriculture, Land Bank partners with government in specific programmes such as BFS and the AgriBEE Fund, which targets agro-processing. 

The Bank also protects its integrity by requiring life cover in some cases, which can be ceded to the Bank in the event of a client’s death, ensuring family members are not drawn into legal disputes. 

With more than R96 million already injected into KwaZulu-Natal’s farming sector in the past 18 months through BFS, and more than R100 million still in the pipeline for this year, the Land Bank is positioning itself as a critical lever in driving agricultural transformation, job creation and food security. 

“Through these interventions, we are working towards our responsibility to grow the industry, create jobs, end hunger and fast-track land redistribution,” Ntamane concluded.