Access to adequate financing is essential for the success and growth of agricultural ventures in South Africa. Farmers need capital for equipment, seed, fertiliser and other inputs essential for production.
Additionally, financing is necessary for marketing their produce, which is a critical step before any revenue is earned.
Navigating the complexities of securing agricultural financing can be daunting, but understanding the available options can significantly enhance a farmer’s ability to succeed.
COMMERCIAL BANKS
Commercial banks in South Africa offer specialised agricultural finance products tailored to the needs of farmers and agribusinesses. These products include term loans, revolving credit, and equipment financing. Farmers should approach banks with experience in agricultural lending and enquire about their loan options, interest rates, and eligibility criteria.
The advantages of approaching a commercial bank for finance are the wide range of financial products offered, the extensive resources that established financial institutions have, and the potential for bigger loans.
The disadvantages, however, are that they have stringent eligibility criteria and higher interest rates compared with other sources.
CO-OPERATIVES AND CREDIT UNIONS
Agricultural co-ops and credit unions provide collective financing opportunities and favourable lending terms.
These organisations offer member-exclusive loan programmes and financial services tailored to the agriculture sector. The pros of co-ops and credit unions is that they are member-oriented and potentially offer lower interest rates. They also have financial products tailored to agricultural needs.
The cons are that they are members-only organisations, and they offer smaller loans compared with commercial banks.
MICROFINANCE INSTITUTIONS
This story is from the August 23, 2024 edition of Farmer's Weekly.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the August 23, 2024 edition of Farmer's Weekly.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Sign In
New farmers' seedling pitfalls
Inexperienced farmers may be tempted to grow seedlings from seed themselves, but they have much to gain by trusting a seedling grower at a nursery to perform this task for them instead
South African avocado production: a success story
Avocado production in South Africa has expanded markedly since the industry's humble beginnings over 80 years ago. From a small grove planted in 1938 in what was then Nelspruit, the industry has blossomed to seven million trees planted on 20 000ha. Dr Guy Witney, project manager at Great Brak Avos, spoke to Annelie Coleman about the country's avocado production.
Unlocking value through livestock exports
Exporting livestock might sound like a daunting business that's better left for big companies, but Gerrie Ferreira, who farms near Oudtshoorn in the Western Cape, has been doing it successfully for almost 30 years, sometimes in partnership with other breeders. He spoke to Glenneis Kriel about the huge potential this market holds, and offers some advice for farmers who are contemplating going this route.
An agribusiness's dedication to community upliftment
For agribusiness NWK, located in Lichtenburg, North West, corporate social investment is an important part of creating a positive influence alongside financial returns. Johan Bezuidenhout, NWK’s group manager of corporate marketing and communication, spoke to Annelie Coleman about why the company chooses to invest millions of rands in the area it operates in every year.
Empowering dreams, transforming lives
Since its launch in 2013, the Agri's Got Talent competition has revolutionised the lives of many farmworkers by unlocking their hidden talents and fostering a culture of empowerment. Glenneis Kriel spoke to various finalists about how the contest has changed their lives.
Foreign investment: agriculture maintains its appeal
South Africa remains a popular destination for foreign investors, despite an often negative outlook from its citizens. It is a gateway to Africa, and with its counterseasonal production to the Northern Hemisphere and favourable weather, local agriculture is especially well placed to attract foreign interest, bringing with it hope for rural communities
The real value and message of COP29 for SA agriculture
While the 2024 Conference of the Parties may have disappointed those who hoped for real progress, it's more important for South African agriculture to highlight its role in carbon mitigation
Improving efficiencies in feed and grain milling
Bühler, a Swiss-based company that provides solutions and equipment for various industries, including food and animal feed processing, has pledged that by 2025, it will deliver scalable solutions that will reduce energy, waste and water by 50% in the value chains of its customers.
Tips for better olive production
At an SA Olive Association field day in November, industry experts shared ways to improve olive production efficiencies, from soil preparation to harvesting.
More effort needed to protect vulnerable cheetah
On International Cheetah Day, commemorated every year on 4 December, emphasis was placed on the vulnerability of the species.
