Drawing on lessons from East Africa, which may mirror those elsewhere in Africa, there are five main legal and regulatory policies that impede agricultural financing:
• International financial reporting standards (IFRS 9). This requires banks to provide loans based on expected credit loss (as opposed to actual occurred credit loss). Banks therefore shy away from risky sectors such as agriculture, because IFRS 9 requires them to make provision for losses more conservatively. The opportunity cost of tying up their capital in a sector that is considered risky deters lenders from providing agricultural loans.
• Capital adequacy ratios (CAR). Banks are required to set aside a percentage of their capital in relation to their risk-weighted assets. The CAR requirements imposed by central banks in East Africa are significantly higher (ranging from 10% to 15%) than those demanded by the international standards under Basel III (8,5%). These CAR levels further deter banks from financing riskier assets, such as small- and medium-sized agricultural enterprises and farmers. The risks for agriculture and the private sector are weighted as higher than real estate and government lending, hence the need for banks to set aside more of their capital as a cushion against risks.
Bu hikaye Farmer's Weekly dergisinin June 03, 2022 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Giriş Yap
Bu hikaye Farmer's Weekly dergisinin June 03, 2022 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Giriş Yap
ARC names best dairy producers of the year
The Agricultural Research Council (ARC) recently announced the winners of the 2024 National Master Dairyman Awards at an event hosted by AgriExpo in Stellenbosch, Western Cape.
Lion breeders to give up bone stockpiles?
The Ministry of Forestry, Fisheries and the Environment issued an official notice in mid-November in which it called on lion breeders to voluntarily hand over their lion bone stockpiles to the state as soon as possible.
Thousands of British farmers march on parliament against inheritance tax
Thousands of UK farmers gathered in London, England, on 19 November to demand the government repeal a proposed inheritance tax on agricultural land, which they argued threatened the future of family-run farms (see page 4), Al Jazeera reported.
Avocado frittata with sundried tomatoes, feta and olives
This wholesome, vibrant frittata is perfect for brunch or a light supper. Recipe and photo: The South African Avocado Growers' Association.
Feed, hay, and other costs are up, so it's time to get creative
Breeders and riding schools need to explore innovative ways to generate income in order to ensure their survival, says Dr Mac.
How to make polystyrene seedling trays last longer
While thinking about how to prolong the lifespan of polystyrene seedling trays that are exposed to harsh sunlight, Bill Kerr began to wonder if a coat of paint might offer a solution.
Living the 'culture' in agriculture
Creation Wines has won numerous awards, was ranked fourth in the World’s Best Vineyards in 2023, and more recently won the V d’Or award for the Best Brand Experience. The owners, Carolyn and Jean-Claude Martin, spoke to Glenneis Kriel about how their winery became a top tourism destination.
Time to take a deep breath on the slopes of the Magaliesberg
Around 100km from both Johannesburg and Pretoria in Gauteng and a tad over 40km from Rustenburg in North West, Farmer’s Weekly found a fine retreat on a working farm where couples may kindle their romance.
African penguins could be extinct by 2035 how to save them
Protecting the critically endangered African penguin is good for the environment, other animal species, and the economy, say Lorien Pichegru and Dr Alistair McInnes of Nelson Mandela University, Katrin Ludynia of the University of Cape Town, and Peter Barham of the University of Bristol in the UK.
An urgent need to confront Nassella in SA
South American grass species from the genus Nassella were unwittingly introduced to South Africa over 120 years ago and continue to invade montane veld. As Mike Burgess writes, research-based action is required.