Building a bankable agribusiness remains one of the most significant challenges facing emerging farmers across South Africa. During a recent panel discussion titled “Becoming Bankable: Building Credible and Investment-ready Agribusinesses” at the African Farming AgriFund Connect Summit held at the Birchwood Hotel & OR Tambo Conference Centre, industry leaders and farmers shared their experiences, challenges and practical solutions for creating sustainable agricultural enterprises.

By Maile Matsimela, Digital Editor at African Farming

The discussion, facilitated by Rebecca Phalatse, General Manager of Marketing and Communications at the Land and Agricultural Development Bank of South Africa, brought together five distinguished panellists: Praveen Dwarika from AFGRI Farmer Development, Gene Likhanya from Madimbo Agri Group, Koketso Baloyi from Diatla Tshweu Farming, Hlobisile Yende from The Yende and Partners, and Pauline Tsolo from Land Bank.

The Foundation: Starting Right

The discussion began with a fundamental question about the importance of getting the basics right from the beginning. Rebecca Phalatse emphasised this critical point: “You can start, you can farm, you can do anything, but if you don’t start right, it will take you forever to get to the point of being bankable, growing, expanding.”

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Praveen Dwarika from AFGRI Farmer Development stressed the importance of understanding one’s ultimate goals before embarking on any agricultural venture. “The first question that we usually ask is how big do you actually want to be in so far as your farming operation is concerned? Understand what your end goal as a farmer is,” he explained.

This thinking extends beyond just scale to encompass the entire business approach. Dwarika highlighted that although technical farming skills can be taught, business acumen is equally crucial: “We can easily teach the technical aspects of farming, and we do that quite well, but what we also partner that with is business management training and financial management training, and we mustn’t shy away from that.”

The Personal Factor: Building Credibility

One of the most striking insights from the discussion was the emphasis on personal credibility over business plans alone. Praveen Dwarika shared a powerful perspective: “What you do at the introduction and how you sell the business plan to me as a concept is more important than selling the business plan to me. So, I must believe in you as the person who’s submitting the business plan, not the business plan itself.”

Hlobisile Yende from The Yende and Partners echoed this sentiment, explaining how she approached potential funders: “I made sure that we appealed to the funders. I wanted them to know and to see that I know the business.”

This personal touch and deep business knowledge became recurring themes throughout the discussion, with speakers emphasising that credibility is built through demonstrated expertise and commitment to the agricultural venture.

Learning Through Experience and Mentorship

The value of experience and mentorship emerged as critical success factors. Gene Likhanya from Madimbo Agri Group put it succinctly: “One thing that cannot be bought is the experience. So, as farmers, you have to walk your journey, you have to make your mistakes.” However, Likhanya also emphasised that mentorship can help minimise costly errors: “Consulting, mentorship … become critical in these processes.”

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Yende shared a personal example of how she balanced traditional knowledge with modern approaches: “I didn’t kick my dad out. I forced myself into his business … bringing in the traditional ways … and his knowledge and putting it with the modern technology.”

Financial Discipline and Reinvestment

The importance of financial discipline emerged as a cornerstone of building bankable agribusinesses. Koketso Baloyi from Diatla Tshweu Farming shared her approach to business growth: “Every profit that I made from the farming business, I put back into the farm.” Baloyi’s commitment to her business was evident in her willingness to make personal sacrifices: “I sacrificed a lot to grow the business as its own because I even sacrifice with the car that I’m driving… I can’t buy a bakkie, it’s not for me right now because … for me, I can’t afford the bakkie.”

She encouraged making short-term sacrifices to achieve long-term goals: “If you see and sacrifice a year of your life and say for this year I’m not drinking alcohol, I’m not eating takeaways … then you will see the growth in your business.”

The Dangers of Scaling Too Quickly

A significant warning emerged from the panel about the risks of rapid expansion without adequate financial backing. Likhanya cautioned: “Scale comes at a cost. We build too quickly… You find yourself in cash-flow challenges because month-end is month-end, diesel is diesel, those things don’t stop.”

This perspective highlights the importance of sustainable growth over rapid expansion, particularly for emerging farmers who may not have sufficient cash reserves to weather operational challenges.

Data as the New Collateral

The role of data and recordkeeping in modern agriculture cannot be overstated. Yende made a particularly compelling point: “Data is now the new collateral because now they want to know the yields… Recordkeeping, traceability, they want to see those things.”

Phalatse reinforced this during the discussion: “Know your business. Keep your records. Have the necessary documentation. Compliance has already passed. You are aware of what is required of you in terms of compliance.”

The Lender’s Perspective

From the funding side, Pauline Tsolo from Land Bank provided valuable insights into what makes a business attractive to lenders. She emphasised the importance of meeting conditions. “When you get the agreement, you need to ensure that each and every condition that is assigned to you is met.”

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Tsolo also highlighted what lenders look for: “Compliance is key. We look at your records, management accounts, cash-flow projections and contracts like offtake agreements to determine credibility.” Importantly, she addressed concerns about credit challenges: “We cannot say because you are blacklisted, we just reject you. You come and then we will look at your case. We want to understand the story and explore how to assist.”

Treating Farming as a Business

Baloyi further emphasised the need to approach agriculture with the same professionalism as any other business. “Treat your farm as a business itself, like the way Shoprite and all these entities treat their business.”

Baloyi also stressed the importance of hands-on management: “When you are farming and you are far from your farm, you are closer to your problems. Your workers will never do anything … the way you, the owner of the farm, are going to do it.”