Knowledge is key in securing a loan

During the 12th episode of African Farming, the agricultural television show on Mzansi Wethu (channel 163), Praveen Dwarika, Managing Director of Lemang Agricultural Services, explained to the show’s host, Angie Khumalo, what factors play a role when credit is given to a farmer.

At only 29 years old, Sinelizwi Fakade is fast becoming one of the top-recognised farmers in the game. Even though he only started commercial farming last year, this young man has everything he needs to make a huge success of it. 

Fakade is in the process of expanding his farm. A farmer growing his business usually means securing funds. Lenders such as AFGRI needs to take certain factors into consideration when a farmer approaches them with a credit application. 

“Lending and borrowing are serious business,” said Dwarika. 

“Especially when you are either in a growth phase or busy with a very big expansion on your farm. And that is why business plans are important. To understand the farm you are buying, you’ve got to know the details behind it. 

“You should know the farm’s production history – that plays a key role in AFGRI’s decision to provide you with credit or not.

“The seeds per hectare, good climatic data on the area, rainfall patterns; if we know that, then we can extrapolate all that information into an in-house model we use to determine how much debt that farm can carry. 

“We provide mentoring and training products, as well as the developing programme that we have. And that all in an effort to make sure a farmer is as successful as they can be. 

“It also gives the company security in knowing that this farm is able to not only grow and sustain itself, but also provide comfort in knowing that the loan is in safe hands.

“That being said, we also look into your farming practices and if we find that we are not comfortable with something you’re doing, even after you have taken the loan from us, you will hear about it.”

In the end it is mutually beneficial for AFGRI and the farmer, if the farm is a success.

For information: visit https://www.afgri.co.za/lemang-agricultural-services/

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