Emerging farmers: South African banks more supportive

The Land Bank will now take respected mentors into consideration when deciding whether to fund emerging farmers.

During the African Farmer’s Association of South Africa (Afasa) annual congress in Johannesburg, Portia Zulu, provincial manager of Land Bank, said emerging farmers must overcome different challenges.

Zulu was part of a panel who discussed funding and support for young, emerging farmers.

“Information, access to inputs, land and collateral when they apply for loans at the bank are only the beginning of the challenges. Because farmers don’t usually settle on collateral, the bank developed products which don’t take these factors, or cash flow, into account,” he said.

Instead, Land Bank considers reliable mentorship as security when granting a loan.

“A reliable mentor will help the emerging farmer take care of the necessary factors such as cash flow, production plans and management. This creates security for the bank that the loan needs to be paid back and therefore, the bank takes a good mentorship program into consideration. In fact, this can be the difference between funding and not funding,” said Zulu.

Diale Mokgojwa, manager of AgriBEE at Standard Bank, encouraged farmers to keep the person reading their application into consideration.

“Emerging farmers must have a mind shift and should regard themselves as business people in an agricultural environment. Funding should be regarded as support in this context,” he while giving advice for when a loan application is submitted.

“When it comes to your business, provide the bank with as much information as possible: who you are, where you come from, the role you will play in your business and whether you can utilise opportunities. This creates context for the bank to determine risks so that the bank can offer mitigating circumstances to decrease the risk,” he said.

Diale said Standard Bank created a mentorship programme to help emerging farmers.

“The programme was developed to help new farmers. Accordingly, Standard Bank appointed a number of retired farmers to supply young farmers with the necessary expertise. This is a service that the bank supplies at no cost, so that the expense of a mentorship program should not be a burden for emerging farmers,” he said.

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