For small farmers and other small entrepreneurs, access to finance is a crucial part of being in the game. Farmers all over the world borrow money for seed, fertiliser and other technologies or inputs. These are investments into the business so that it is able to generate products to sell. Finance is also necessary to market the produce. All of this requires money – before the farmer has earned a cent!
You need money to create money.
This page is a sketch, by no means conclusive, of the financial assistance to small, medium and micro-sized enterprises (SMMEs) in the country, with an emphasis on those touching on the agricultural value chain.
Instead of talking about creating five million jobs by , [government] should be saying we are going to create one million new enterprises by then – in other words one million new entrepreneurs with the freedom to do their own thing within an open, inclusive economy. If each of them hires on average four people, you have five million new jobs.
Meanwhile, very few captains of industry are helping to expand the space and provide support for entrepreneurs. Educational institutions have not woken up to the fact that the game of work has changed and, as such, they are still educating their students for the job market that existed 50 years ago.
Source: Clem Sunter
Credit from commercial banks
Only credit grantors that are registered with the National Credit Regulator (NCR) may grant credit. Visit www.ncr.org.za to find out more, including information and tips, debt counselling etc.
Farmers who want to establish or expand their farming operations can obtain finance from commercial banks. It is, however, important that they understand the terms and conditions of credit, e.g. what credit is and repayment requirements.
What is credit and why do you need it?
Credit is money borrowed from someone or from a bank by agreement with the promise to pay it back at a later date, with or without interest.
Commercial banks grant credit to farmers for various purposes e.g. for equipment, vehicles, land, livestock, irrigation equipment, water pumps, etc. The bank will want to know how the credit is going to be used and what your financial position is (assets and liabilities). Your bank will want to know this in order to assess your ability to generate income and pay back the loan. The bank will look at your:
- assets and liabilities (financial standing)
- present and expected income (cash flow)
- risks involved and how you plan to cover them
- knowledge of the industry in which you want to get involved
Ask your financial advisor or extension officer or to assist you to compile this information. The extension officer is a person who works for the Department of Agriculture in your area and who is trained to assist farmers in agricultural matters.
When and how much can you borrow?
- Know the purpose for which you are borrowing money – to improve the performance of your farming operations.
- Do not apply for credit that will generate too little income to cover the interest and capital (money borrowed) repayments.
- Therefore, the expected net income (income left over after all expenses have been deducted, except tax and interest) will give a good indication of how much debt the project will be able to carry.
- When applying for credit, make sure that your debt is not more than 30% of your current assets and 25% of the expected income.
Repaying the bank
Before any commercial bank can grant a loan, it determines whether your income exceeds your costs to such an extent that there will be enough money to repay the loan and to cover household expenses.
The bank will ask for a collateral or security for the loan. A collateral or security is property pledged as security for the loan. Should you fail to repay your loan, the bank will repossess your property and sell it to realise its security.
Property which is presented as collateral must meet certain requirements:
- It must be identifiable and not perishable.
- It must be in a saleable condition.
- The bank must be able to estimate its market value.
- It must be your own property and preferably not immovable.
Repaying the loan within a given time limit will improve your credit worthiness and credibility with the bank and also save on interest charges.
The best incentive to repay a loan is to have access to future loans.
How to apply
Once you have identified why you have to borrow money, you can go to your nearest bank and fill in application forms. Your application should contain all the relevant information because it forms the basis for negotiations with the bank manager.
After submitting the forms, the bank will call you in for an interview. (You are allowed to take someone who knows your business well with you, if you like).
During the interview you will be given a chance to motivate your proposal, negotiate the possible loan terms and also to develop a good business relationship with your bank manager – prepare the presentation of your loan request beforehand.
The bank manager will tell you after the interview whether your application was successful or not.
See the “Providers of financial services” page for contact details of the commercial banks.
The term “Emerging Farmer” is commonly applied both to farmers who are emerging in terms of scale and to farmers who are emerging in terms of lack of skills.
Farmers who are emerging in terms of scale battle with problems such as access to markets, quality inputs, land and finance. These farmers are no riskier than other categories of farmers. Rather, it is the environment in which they operate that brings increased risk. The business of a tomato grower in Giyani is obviously riskier than that of ZZ2 because the scale is smaller and market access is not there. But in terms of production techniques, the Giyani grower is equal to any top farmer.
These farmers need a financing programme that includes support structures. For example, if such a farmer can be assisted to acquire a contract to supply a large retailer, this contract can be ceded to us in security for his or her loan. But it is also important to look beyond retailers for off-take agreements, especially as there is large untapped potential in informal markets.
Source: Andrew Makanete
Role players: government and state-owned
Emerging businesses often find that these institutions offer services that are not available to them by commercial banks.
The Development Bank of Southern Africa (DBSA) provides finances to projects related to the development of infrastructure. If your proposed venture focuses on the development of infrastructure you are entitled to apply for funds from this bank. The operations office can be contacted at 011 313 3911. See www.dbsa.org.
If you are exporting, the Export Credit Insurance Corporation of South Africa (ECIC) might be able to help. The ECIC evaluates export credit and foreign investment risks and provides export credit and foreign investment insurance cover on behalf of government. Visit www.ecic.co.za or call 012 471 3800.
All government departments are tasked with growing their sphere of the economy and have (access to) various grants and funding mechanisms. Find a list of these departments at www.gov.za. The Department of Small Business Development (DSBD) is a first stop. See www.dsbd.gov.za. Enquire about its Township and Rural Enterprises Programme (TREP). It has also taken over many of the SMME Development Financial Assistance programmes. Examples include Black Business Supplier Development Programme (BBSDP), Co-operative Incentive Scheme (CIS) and the Shared Economic Infrastructure Facility (SEIF). The Department of Trade, Industry and Competition (the dtic) has a number of financial incentives for businesses (take the “Financial assistance” option at www.thedtic.gov.za). The Department of Agriculture, Land Reform and Rural Development (DALRRD) runs the AgriBEE Equity Fund programmes, for example. Its Micro-agricultural Financial Institution of South Africa (MAFISA) is being reworked into the Comprehensive Producer Development Support Policy. The previous Department of Rural Development and Land Reform recently committed R133 million to the South African Farmers Development Association (SAFDA)’s fertiliser programme to benefit 11 650 emerging farmers in KwaZulu-Natal and Mpumalanga on a total of 35 000 hectares of sugarcane. Visit www.dalrrd.gov.za.
Various financial incentives offered by government can help the entrepreneur in agriculture. Take a look at www.investmentincentives.co.za.
The Independent Development Trust operates largely within the realm of the second economy, supporting government to implement developmental projects. The national number is 012 845 2000. Visit www.idt.org.za. The provincial offices contact details are available on the website.
The Industrial Development Corporation (IDC) finances initiatives in different sectors including agriculture and agro-processing. Clients must show assets and/or a certain amount of savings. The main telephone number is 011 269 3000. Visit www.idc.co.za.
The Jobs Fund offers backing to established companies which want to expand existing operations which will employ people. See www.jobsfund.org.za.
The Land Bank provides finance to all sectors of the agricultural economy and agri-business. If you are involved in these activities you can apply for finance. The Retail Emerging Markets (REM) financing package helps fund resource-poor farmers at preferential interest rates until they become established. For more information on services visit the Land Bank website www.landbank.co.za or call the toll free queries number: 012 686 0500. Contact Beaufort West 023 414 8300 Bethlehem 058 307 5200 Pietermaritzburg 033 845 9600 Bloemfontein 051 404 1400 Polokwane 015 287 9840 Calvinia 027 341 8140 Douglas 053 298 1126 Port Elizabeth 041 392 1200 Cape Town 021 974 2200 Mbombela 013 754 2400 Cradock 048 801 8900 Pretoria 012 432 0480 East London 043 706 8600 Mthatha 047 531 1979 Rustenburg 014 590 6900 Ermelo 017 811 0800 George 044 803 8800 Tzaneen 015 306 6000 Upington 054 338 8400 Lichtenburg 018 632 7700 Vryburg 053 928 1700 Vredendal 027 213 1045 Kroonstad 056 216 6200 Worcester 023 342 1756
Local Economic Development (LED) agencies is one measure available to district municipalities to support SMEs and to encourage investment. Enterprise Ilembe, situated between Durban and Richard’s Bay in KwaZulu-Natal, is one such organisation. Call it at 032 946 1256 or read about it at www.enterpriseilembe.co.za or www.ilembe.gov.za.
National Development Agency (NDA) has the mandate to “eradicate poverty by granting funds to civil society organisations that implement developmental projects in all provinces”. We list telephone numbers here. The website gives additional contact details like physical address. Visit www.nda.org.za. Contact Eastern Cape 043 721 1226 Mpumalanga 013 755 3777 Free State 051 430 2024 North West 018 392 6892 KwaZulu-Natal 031 305 5542 Northern Cape 053 831 4828 Gauteng 011 492 1494 Western Cape 021 422 5175 Limpopo 015 291 2492
The National Empowerment Fund (NEF) seeks “to support black enterprise development in South Africa’s industrial value chain, as well as act as a catalyst for accelerating job creation in line with government’s New Growth Path”. Call the NEF at 0861 843 633 or visit www.nefcorp.co.za.
The National Youth Development Agency (NYDA) can be contacted at 087 158 6345/5738. Visit their website at www.nyda.gov.za. Provincial office contacts: Eastern Cape East London 087 158 7744 Eastlondon [at] nyda.gov.za, Port Elizabeth 087 158 7904 Portelizabeth [at] nyda.gov.za, Mthatha Umthatha [at] nyda.gov.za Free State Bloemfontein 087 158 7606 Bloemfontein [at] nyda.gov.za Gauteng Randfontein 087 283 0724/0730 Westrand [at] nyda.gov.za, Johannesburg 087 158 7795 Johannesburg [at] nyda.gov.za, Tshwane 087 158 7991 Tshwane [at] nyda.gov.za, Boksburg Ekurhuleni [at] nyda.gov.za, Evaton Sedibeng [at] nyda.gov.za KwaZulu-Natal Durban 087 158 7712 Durban [at] nyda.gov.za, Empangeni 035) 907 5605 Richardsbay [at] nyda.gov.za, Newcastle 0871587862 Newcastle [at] nyda.gov.za Limpopo Polokwane 087 158 7873 Polokwane [at] nyda.gov.za, Thohoyandou 087 158 7611 Thulamela [at] nyda.gov.za Mpumalanga eMalahleni 087 158 7958 Emalahleni [at] nyda.gov.za, Mbombela 087 158 7829 Mbombela [at] nyda.gov.za, Secunda 087 158 7936 Secunda [at] nyda.gov.za North West Mahikeng jeremiah.lukas [at] nyda.gov.za, Vryburg Vryburg [at] nyda.gov.za Northern Cape Kimberley 087 158 7799 Kimberley [at] nyda.gov.za Western Cape Cape Town 087 158 7701 Capetown [at] nyda.gov.za
Provincial government departments also run programmes. The Department of Economic Development, Environmental Affairs and Tourism (DEDEA) in the Eastern Cape runs IMVABA, the provincial co-operative development fund. Find IMVABA at www.imvaba.co.za. Other examples include the KZN Growth Fund and the Operation Vula Fund from the KZN Department of Economic Development, Tourism and Environmental Affairs; and the the four-year DFDC Commercialization Programme for emerging Western Cape fruit farmers which saw these recipients receiving R120 million in support funding. Visit the websites of provincial departments tasked with economic development for an idea of what is on offer. What happens in your province?
Provincial development agencies – e.g. the Limpopo Economic Development Agency, North West Development Corporation, Gauteng Growth and Development Agency (GGDA) etc – give financial assistance to co-operatives and small businesses. Find details of provincial bodies on the “Providers of financial services” page.
Small Enterprise Development Agency (SEDA) is an agency of the Department of Trade and Industry. SEDA has offices throughout the country to help the SMME with business plans, company registration, proposals for funding and more. We provide phone numbers here. The website gives contact people, email and physical addresses. Visit www.seda.org.za.
Eastern Cape: 043 706 6700
- Mount Ayliff 039 254 6500 / 0326
- East London 043 709 6200/1
- Mthatha 047 504 2300
- Port Elizabeth 041 390 8500
- Queenstown 045 808 6600/1/2/3
Free State: 051 411 3820
- Bethlehem 081 389 6517
- Kroonstad –
- Sasolburg 063 114 6047
- Trompsburg 051 713 9500
Gauteng: 011 408 6500 / 20
- Braamfontein 011 408 6500/26
- Kempton Park 011 973 9640/9643
- Pretoria 012 441 1391/7
KwaZulu-Natal: 031 277 9500
- Ethekwini 031 277 9500
- Ixopo 039 834 7100
- Ladysmith 036 638 9780
- Newcastle 328 0620
- Pietermaritzburg 033 264 3100
- Port Shepstone 039 688 1560
- Richards Bay 035 901 2660
Limpopo: 015 287 2940
- Groblersdal 013 262 9430
- Mokopane 015 492 9600
- Polokwane 015 290 8720
- Thohoyandou 015 960 8700
- Tzaneen 015 306 6400
Mpumalanga: 013 755 8730
- Bushbuckridge 013 799 5340
- eMahahleni 013 655 6970
- Malelane 013 790 1183
- Mbombela 013 754 4380
- Secunda 017 634 4339
North West: 014 591 7900
- Brits 012 262 9120
- Klerksdorp 018 487 9120
- Mahikeng 018 391 9900
- Rustenburg 014 591 8460
- Vryburg 053 928 8800
Northern Cape: 053 839 5700
- Calvinia –
- De Aar 053 632 7590/60
- Kimberley 053 836 7720
- Springbok 027 712 8500
- Upington 054 337 8280
Western Cape: 021 487 3640
- Atlantis 021 577 1086
- Beaufort West 022 414 3368
- Bellville 021 949 2227
- Cape Town 021 487 3660
- George 044 803 4900
- Hermanus 028 312 2359
- Khayelitsha 021 361 1360
- Knysna 382 2861
- Mossel Bay 044 695 0513/28
- Oudtshoorn 044 272 7783
- Overberg 023 342 2381
- Stellenbosch 021 861 4800
- Vredenburg 022 713 4405
- Worcester 023 342 2381
The IDC’s small business development agency is the Small Enterprise Finance Agency (SEFA). See www.sefa.org.za for information on the different offerings. Regional office contacts: Eastern Cape East London 043 721 1510, Port Elizabeth 041 391 6200/6201 Free State Bloemfontein 051 436 0150, Welkom 057 916 1960, Trompsburg 051 713 9500, Bethlehem 058 718 5900, Sasolburg 016 974 5500 Gauteng Johannesburg 011 484 0889, Riverside 087 288 6000, Kempton Park 011 484 0850 KwaZulu-Natal Durban 031 368 3485, Port Shepstone 039 688 1560, Ladysmith 036 638 9780, Richards Bay 035 901 2660, Newcastle 034 328 0620, Pietermaritzburg 033 264 3100, Ixopo 039 834 7100 Limpopo Polokwane 015 294 0900, Thohoyandou 015 960 8700, Tzaneen 015 492 9600, Mokopane 015 492 9600, Jane Furse 087 285 6215 Mpumalanga Nelspruit 013 755 3923, Secunda 017 634 4339, Malelane 013 790 1183, Bushbuckridge 013 799 5340 North West Rustenburg 014 592 6391, Klerksdorp 018 487 9120, Vryburg 053 928 8800, Mahikeng 018 397 9942 Northern Cape Kimberley 053 832 2275, Kuruman 053 714 3160, Upington 054 337 8280, De Aar 053 632 7560, Springbok 027 712 8500, Olyvenhoutsdrift Settlement (also in Upington) 054 337 8600 Western Cape Cape Town 021 418 0126, Bellville 021 949 2227, Khayelitsha 021 361 1360, Mossel Bay 044 695 2840, Knysna 044 382 2861, George 044 874 4770, Oudtshoorn 044 272 7783, Beaufort West 023 414 3368, Hermanus 028 312 2359, Stellenbosch 021 861 4800, Worcester 023 342 2381, Vredenburg 022 342 2381, Saldanha 022 714 1731
Thusong Service Centres provide small business advice and development. See www.thusong.gov.za.
EASTERN CAPE Bisho 040 609 6009 East London 043 722 2602/9
- On the website find contact details for: Burgersdorp Thusong Service Centre, Centane Thusong Service Centre, Cofimvaba Thusong Service Centre, Jansenville Thusong Service Centre, KwaNophoyi Thusong Service Centre, Qunu Thusong Service Centre, Silindini Thusong Service Centre, Sterkspruit Thusong Service Centre, Tombo Thusong Service Centre, Tsilitwa Thusong Service Centre, Viedgiesville Thusong Service Centre
FREE STATE Witsieshoek 051 403 3286, 051 405 3891 and 082 900 8042 Bloemfontein 082 773 9445
- On the website find contact details for: Botshabelo Thusong Service Centre, Kopanong Thusong Service Centre, Mohokare (Zastron) Thusong Service Centre, Namahadi Thusong Service Centre, Phiritona Thusong Service Centre, Tokologo Thusong Service Centre
GAUTENG Marshalltown 011 355 6034 Johannesburg 011 834 3560, 082 447 6617 and 083 570 8080
On the website find contact details for: Atteridgeville Thusong Service Centre, Boitshepiville Thusong Service Centre, Bophelong Thusong Service Centre, Eldorado Park Thusong Service Centre, Ga-Rankuwa Thusong Service Centre, Hammanskraal Thusong Services Centre, Ipelegeng Thusong Service Centre, Kagiso Thusong Service Centre, Khutsong Thusong Service Centre, Mafatsane Thusong Service Centre, Mamelodi Thusong Service Centre, Maponya Urban Mall Thusong Service Centre, Muldersdrift Thusong Service Centre, Orange Farm Thusong Service Centre, Ratanda Thusong Service Centre, Sebokeng Thusong Service Centre, Sicelo Shiceka Thusong Service Centre, Soshanguve Thusong Service Centre, Tarlton Thusong Service Centre
KWAZULU-NATAL Pietermaritzburg 033 355 6188, 033 355 6568 Durban 031 355 6105
- On the website find details for: Archie Gumede Thusong Service Centre, Bamshela Thusong Service Centre, Belgrade Thusong Service Centre, Bhomela Thusong Service Centre, Driefontein Thusong Service Centre, Dududu Thusong Service Centre, Dukuza Thusong Service Centre, Ekuvukeni Thusong Service Centre, eMondlo Thusong Service Centre, Highflats Thusong Service Centre, Imbabazane Thusong Service Centre, Impendle Thusong Service Centre, Inhlazuka Thusong Service Centre, Jozini Thusong Service Centre, KwaMadlala Thusong Service Centre, KwaMdakane Thusong Service Centre, KwaNzimakwe Thusong Service Centre, KwaXolo Thusong Service Centre, Lindela Thusong Service Centre, Malangeni Thusong Service Centre, Mapumulo Thusong Service Centre, Mbazwana Thusong Service Centre, Sonkombe Thusong Service Centre, Tugela Ferry Thusong Service Centre, Umnini Thusong Service Centre, Umshwathi Thusong Service Centre
LIMPOPO Polokwane 015 294 7751, 015 291 4689, 082 687 3340 and 082 421 3461
- On the website find details for: Babirwa Thusong Service Centre, Botlokwa Thusong Service Centre, Bulamahlo Thusong Centre, Eldorado Thusong Service Centre, Festus Mothudi Thusong Service Centre, Fetakgomo-Atok Thusong Service Centre, Leboeng Thusong Service Centre, Lesedi Thusong Service Centre, Mabatlane (Vaalwater) Thusong Centre, Madimbo Thusong Service Centre, Makhuva Thusong Service Centre, Makuya Thusong Centre, Mapela Thusong Service Centre, Mapodile Thusong Service Centre, Maruleng Thusong Service Centre, Mokwakwaila Thusong Service Centre, Moletjie Thusong Service Centre, Mtititi Thusong Service Centre, Relela Thusong Service Centre, Selwane Thusong Service Centre
MPUMALANGA Mbombela 013 766 6993, 013 753 2397, 072 228 4624 and 076 593 4586
- On the website find details for: Breyten Thusong Service Centre, Casteel Thusong Service Centre, Daggakraal Thusong Service Centre, Louisville Thusong Service Centre, Marapyane Thusong Service Centre, Matsamo Thusong Service Centre, Mbangwane Thusong Service Centre, Moremela Thusong Service Centre, Morgenzon Thusong Service Service, Mpuluzi Thusong Service Centre, Phola Thusong Service Centre, Sakhile Thusong Service Centre, Saul Mkhize Thusong Service Centre, Siyathemba Thusong Service Centre, Tholulwazi Thusong Service Centre, Thuthukani Thusong Service Centre, Verena Thusong Service Centre, Wonderfontein Thusong Service Centre
NORTH-WEST Mmabatho 018 387 3456, 018 381 7071, 082 378 0038 and 073 245 0906
- On the website find details for: Bokamoso/Jerico Thusong Service Centre, Kgetleng River Thusong Service Centre, Kgokgojane Thusong Service Centre, Leretlhabetse Thusong Service Centre, Losasaneng Thusong Service Centre, Monakato Thusong Service Centre, Tlakgameng Thusong Service Centre, Tshedimosetso Thusong Service Centre, Tshidilamolomo Thusong Service Centre, Victor Tong Thusong Service Centre
NORTHERN CAPE Kimberley 053 838 2718, 053 832 1378/9, 082 495 3733 and 083 778 9179
- On the website find details for: Augrabies Thusong Service centre, Colesberg Thusong Service Centre, Kgomotsego (Vanzylsrus) Thusong Service Centre, Manne Dipico Thusong Service Centre, Tlhokomelo Thusong Service Centre
WESTERN CAPE Cape Town 021 483 3839, 021 418 0533, 082 378 0038 and 081 281 2200
- On the website find details for: Beaufort West Thusong Service Centre, Bitterfontein Thusong Service Centre, Bonteheuwel Thusong Service Centre, Citrusdal Thusong Service Centre, Hawston Thusong Service Centre, Ilingelethu Thusong Service Centre, Ladismith Thusong Service Centre, Laingsburg Thusong Service Centre, Langebaan Thusong Service Centre, Mbhekweni (Paarl East) Thusong Service Centre, Mossel Bay Thusong Service Centre, Murraysburg Thusong Service Centre, Oudtshoorn Thusong Service Centre, Prince Albert Thusong Service Centre, Riversdale Thusong Service Centre, Swellendam Thusong Service Centre, Thembalethu Thusong Service Centre, Unobuntu Thusong Service Centre, Van Rhynsdorp Thusong Service Centre, Vredendal Thusong Service Centre, Waboomskraal Thusong Service Centre
Youth Employment Service (YES) Community Hubs are part of a national strategy to “absorb unemployed youth, ignite local economies and promote domestic markets”. The first of a planned 100 such hubs was opened in Tembisa in 2018. See the news report. Visit the YES website at www.yes4youth.co.za.
When it comes to financial assistance, the aim should be to help beneficiaries become self-sufficient. Farming is a business just like any other, and if you want to farm you have to start thinking like a businessperson. I think loans, rather than grants, would do more to reduce poverty and generate value-added wealth. If farmers should get anything for free, it’s training [i.e. it is training which will lead to success, not being given money].
Source: Peter Mashala
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Business and other role players
Find details of various regulatory bodies on the “Providers of financial services” page.
The B-BBEE scorecard allows rewards companies whose financial contributions favour Black people. Read more in the Black Economic Empowerment chapter, or contact role players like Enterprise Development Organisation (MEDO). MEDO connects emerging micro enterprises which are at least 50% black-owned – annual turnover of less than R5million – with large South African companies – annual turnover above R35million. Visit www.medo.co.za or call MEDO at the following numbers: 010 500 5000 (Johannesburg); 021 3000 500 (Cape Town).
Various bodies representing business might be able to assist. Some have an agriculture/food desk. Usually though they will point you to organised agricultural bodies like AFASA and AgriSA (see the “Organised agriculture“ page). Nevertheless, the reader is welcome to give organisations like the Foundation for African Business & Consumer Services (FABCOS) and the Black Business Council a try. See www.fabcos.org or call 087 095 0272, or https://blackbusinesscouncil.africa and 011 463 2439.
The commercial banks have specialist SME divisions, providing finance for qualified entrepreneurs. Contact the banks or visit their websites to find out about their products and services, and their criteria to obtain finance. Most banks also participate in credit guarantees. The Banking Association South Africa represents this group. See www.banking.org.za.
Co-operative banks are a possibility. Refer to the page on co-operatives.
Development finance institutions (DFIs) are listed under the previous heading. These are institutions like the IDC, Land Bank etc.
Foundations working with industry associations (or on their own) can be a source of agricultural finance. An example is Coca-Cola Beverages South Africa’s (CCBSA) Mintirho Foundation, which has partnered with the South African Farmers Development Association (SAFDA) on several occasions.
Industry associations might have knowledge of funds for role players in their sectors. These associations are listed in the various crop and livestock chapters. Some of these associations might be actively involved in sourcing funds. The National Emergent Red Meat Producer’s Organisation (NERPO), for example, runs farmer support programmes called “NERPO-Livestock Credit Scheme”(NLCS) and Farm Machinery and Infrastructure Credit Fund. Contact 012 492 1383 or 083 640 5352. CANEGROWERS (see sugarcane page) or Akwandze Agricultural Finance – 013 791 1396 (Malalane) or 013 723 4247 (Komatipoort) – would be able to tell you about the Khula-Akwandze Fund (KAF) for small-scale sugar farmers. Also available is funding from Umthombo Agricultural Finance (Umthombo) – speak to the South African Sugar Association (SASA) at 031 508 7085 or email umthombo [at] sasa.org.za. Hortfin is a R600 billion, special purpose development financing vehicle established by the deciduous, table grape and wine industries. The custodian of Hortfin is the deciduous fruit industry, supported by the Jobs fund and Land Bank. It targets mostly agri entrepreneurs from previously disadvantaged groups. Read more at www.hortgro.co.za/inclusive-growth/hortfin/
National Stokvel Association of South Africa (NASASA) http://nasasa.co.za Research by African Response shows some R44 billion is saved and accessed through stokvels (Rotating savings and credit associations). See also the Siyanda Sishuba article “Stokvel concept offers hope to young farmers” for Farmer’s Weekly.
Some pension funds like the Government Employees Pension Fund (GEPF) invest in the agricultural value chain. In the 2017/18 year the GEPF invested R2.3 billion in this sector.
Retail Finance Intermediaries (RFIs) are institutions that obtain loans from the state in order to loan the money to clients in their communities. Different RFIs have different target markets depending on their operations. RFIs also use the Credit Guarantee Scheme to access additional funds from participating banks. RFIs charge different interest rates depending on the risk involved in the application.
Specific role players
- Agricultural Business Chamber (Agbiz) www.agbiz.co.za Agbiz has held workshops before on finding ways to provide sustainable funding to emerging farmers. ABSA, FNB, Standard Bank and Nedbank are all members of Agbiz.
- The Agricultural Colleges provide short course training in financial skills. Find contact details on the Agricultural education and training page.
- ANDISA Agri www.andisaagri.com Services include managing “change of control” transactions and land reform transaction advisory, business planning and feasibility studies.
- BeyondCOVID www.beyondcovid.co.za organising small businesses into collectives and then partnering them with established corporates to achieve the economies of scale required to access profitable markets, funding and supply chains.
- BSSA Consulting www.bssa.co.za Business plans, marketing plans, access to grants and funding, entrepreneurial training etc.
- Business Partners has a range of support services to the entrepreneur. The company considers financing application up to R50 million for SMEs. It does not support farming, but may be able to help if you are looking to supply agricultural inputs or doing some form of processing. Find contact details of their branches countrywide at www.businesspartners.co.za.
- Cape Clothing and Textile Cluster https://capeclothingcluster.org.za A not-for-profit initiative jointly established by government and industry to boost the competitiveness of the clothing, textile, footwear and leather (CTFL) manufacturing industry in the Western Cape.
- Capital Harvest Emerging Farmer Finance www.cheff.co.za
- Co-operative Banks Development Agency (CBDA) www.treasury.gov.za/coopbank
- Craft and Design Institute (CDI) Tel: 021 461 1488 www.thecdi.org.za Business-, product-, market- and design support
- Croftland Business Development Services (Croftland BDS) www.croftlandbds.com [website not working, 24 June 2021] A business advisory, investment, implementation and support services company.
- Development Microfinance Association (DMA) www.dmasa.org.za
- The DGRV assists co-operatives. Visit www.dgrv.coop/project/south-africa/.
- Ecosystem Development for Small Enterprise (EDSE) https://edse.org.za EDSE is funded by the European Union
- The Enablis Acceleration Fund is a partnership between Enablis Financial Corporation SA (Pty) Ltd and Khula Enterprise Finance Limited. See www.elsenburg.com/content/enablis-acceleration-fund.
- ENDEAVOR and SA SME Fund https://sasmefund.co.za
- Forus www.forus.co.za “No fees. No interest. No bank”
- Get Smarter www.getsmarter.com, short business courses
- Kagiso Trust www.kagiso.co.za
- Lulalend www.lulalend.co.za
- The Masisizane Fund is an initiative of Old Mutual South Africa, with the mandate to contribute to employment creation, poverty eradication and reduction of inequality, economic growth and the attraction of investment. Find the “Branch locator” option at www.masisizane.co.za.
- Megro Learning Centre www.megrolowveld.com
- Microfinance South Africa www.mfsa.net
- National Credit Regulator (NCR) www.ncr.org.za To prevent abuse by lenders of credit (e.g. exorbitant interest rates, unfair blacklisting)
- National Empowerment Fund (NEF) www.nefcorp.co.za. Several funds are available: the iMbewu Fund, uMnotho Fund, Rural and Community Development Fund, the Strategic Projects Fund, Tourism Transformation Fund (TTF).
- National Small Business Chamber (NSBC) www.nsbc.org.za
- Nicro www.nicro.org.za
- Peulwana Agricultural Financial Services http://peulwana.co.za AgriFinance Loan Programme
- Palaborwa Foundation http://pafound.org
- Productivity SA www.productivitysa.co.za “Inspiring a competitive South Africa”
- Resonance Institute of Learning www.ril.co.za Training courses include financial and entrepreneurial skills
- The SA SME Fund is a collaboration between government, labour and business to support for the SME sector. It allocates investment capital to accredited fund managers – venture capital or private equity funds – that invest directly in scalable small and medium enterprises i.e. it does not provide funding directly to individuals. See http://sasmefund.co.za.
- SBP Business Environment Specialists www.sbp.org.za Design and implement programmes for SMMEs
- Seriti Institute https://seriti.org.za Training in financial management
- Small Business Advisory Bureau http://commerce.nwu.ac.za/sbab
- Small Enterprise Foundation www.sef.co.za
- South African Business Resources Institute (SABRI) www.sabri.co.za SABRI nurtures promising SMEs through the start up and growth phases of their business by (1) Strengthening the internal capacities, systems and processes (2) Encouraging entrepreneurship and facilitating skills development, and (3) Co-ordinating access to resources required to grow a business.
- South African Institute for Entrepreneurship www.entrepreneurship.co.za Courses and products like the Agri Planner for individuals and co-operatives
- South African Savings Institute (SASI) www.savingsinstitute.co.za
- South African SME Finance Association http://sasfa.net
- Thembani International Guarantee Fund (TIGF) provides Credit Guarantees. Visit www.tigf.co.za.
- Read about the Tembeka Business Development Trust (TBDT) at www.facebook.com/TembekaBusinessDevelopmentTrust/.
- Trade & Industrial Policy Strategies (TIPS) is a research organisation which has a focus on economic inclusion. Visit www.tips.org.za.
- United Farmers’ Fund Trust (UFF) https://uff.co.za Offering “investment opportunities to clients while delivering high social impact to rural communities”
- University of South Africa (UNISA) Centre for Business Management Tel: 012 352 4288 www.unisa.ac.za The Centre offers Short Learning Programmes (SLPs) that prepare learners for the business world in a quick and effective manner.
- The Vumelana Enterprise Development Fund – see http://vumelafund.com. Venture capital funding, from R2 million up to R20 million, provided to South African SMEs who show potential to scale exponentially.
- West Coast Business Development Centre https://wcbdc.co.za
- Find notes on the Zimele fund by Anglo American on www.angloamerican.co.za. It is an initiative to assist historically disadvantaged South Africans to own and run their businesses. Zimele provides loans and also teaches essential business skills.
International business environment
- The African Development Bank (AfDB) runs the Africa Small and Medium Enterprises programme – www.afdb.org
- African Rural and Agricultural Credit Association (Afraca) – http://afraca.org
- Développement international Desjardins (DID) – http://did.qc.ca
- International Fund for Agricultural Development (IFAD) – www.ifad.org
- Making Finance Work for Africa (MFW4A) – www.mfw4a.org (find the Africa Finance Forum Blog run by MFW4A at http://aff.mfw4a.org)
- Oxfam International has several papers dealing with small-scale agriculture. These include “Accountability deficit?” and “A living income for small-scale farmers“. Find these at www.oxfam.org/en/tags/small-scale-agriculture.
- Schwab Foundation for Social Entrepreneurship www.schwabfound.org
- World Economic Forum (WEF) www.weforum.org
Websites and publications
Included in the seventeen manuals on developing a co-operative at www.dalrrd.gov.za are ones like Developing a business plan (7), Financing your agricultural business (11) and Financial management (12). Find the full list on the “Co-operatives” page.
Find the Step-by-step business plan guide by Standard Bank at https://bizconnect.standardbank.co.za/start/business-planning/reference-documents/step-by-step-business-plan-guide.aspx
Some media houses run magazines and newsletters for SMMEs. To see what is on offer from Entrepreneur Media SA, by way of example, visit www.entrepreneurmag.co.za.
Read The SA SMME COVID-19 Impact Report (2020, November) at www.finfind.co.za/funding-research-insights-and-reports. The Finfind South African SMME Access to Finance Report (2018) can be found at https://accesstofinancereport.co.za.
Serame M. 2019. Factors Influencing SMEs’ Access to Finance in South Africa. Master’s dissertation. Available at https://open.uct.ac.za/bitstream/handle/11427/30479/thesis_com_2019_serame_molobeng.pdf
Groenewald, J.A., & Jordaan, A.J. 2012. Unlocking credit markets. In Unlocking markets to smallholders. Edited by van Schalkwyk, H.D et al. Wageningen: Wageningen Academic Publishers.
Find the guideline for funding agencies for aquaculture on DALRRD‘s Directorate Aquaculture and Economic Development pages at www.dalrrd.gov.za. Many of the listed providers have funding programmes beyond aquaculture.
Patronage Politics Divides Us: A study of poverty, patronage and inequality in South Africa – research finds that a lack of start-up capital and official indifference to be common complaints among aspirant business people. Contact MISTRA (see previous heading).
Read about the Addis Ababa Action Agenda on sustainable financing at https://sustainabledevelopment.un.org/frameworks/addisababaactionagenda.
Various agricultural and other projects looking for backing from investors can be found at www.investmentnetwork.co.za.
The first online platform for peer-to-peer lending (P2P) in South Africa is RainFin. Small businesses can access funding and investors typically get better returns than those offered by banks. See www.rainfin.com.
Oji, C.K. 2015. Promoting Financial Inclusion for Inclusive Growth in Africa. Pretoria: South African Institute of International Affairs. Find the document at www.saiia.org.za.
It is not only individuals who struggle for shortage of capital. The World Bank’s “Global Financial Development Report 2015/2016: Long-Term Finance” looked at how shortage of capital has left underdeveloped countries struggling to grow their economies. Find the report at www.worldbank.org.
Small Business Connect www.smallbusinessconnect.co.za
SME South Africa www.smesouthafrica.co.za
- Read Agribook blogs like “Online application platform for CADS Fund now available“, “Founding of Agricultural Development Agency ‘A New Landmark in SA History’“, “Old Mutual’s Masisizane Fund celebrates 12 years of building SMME’s and empowering South Africans” and a success story “Matatiele farmer reaps reward of a dream come true” of a farmer financed by the Masisizane Fund.
- Reporter. 2021, August 12. “Access to financial services remains a challenge for female farmers”. SA News. Available at www.sanews.gov.za/south-africa/access-financial-services-remains-challenge-female-farmers
- Reporter. 2021, June 11. “R300m to fund KZN small business”. SA News. Available at www.sanews.gov.za/south-africa/r300m-fund-kzn-small-business
- Mokwena T. 2021, May 24. “This govt programme aims to boost rural and township entrepreneurs”. Eye Witness News. Available at https://ewn.co.za/2021/05/24/this-govt-programme-aims-to-boost-rural-and-township-entrepreneurs
- Botha L. 2021, May 7. “Blended finance offers viable opportunities”. Farmer’s Weekly. Available at www.farmersweekly.co.za/farm-basics/how-to-business/blended-finance-offers-viable-opportunities/
- Mokwena T. 2021, May 3. “Failure rate of S.African SMMEs under spotlight”. Eye Witness News. Available at https://ewn.co.za/2021/05/03/failure-rate-of-s-african-smmes-under-spotlight
- Larkin P. 2021, March 26. “Endeavor and SA SME Fund LSU programme aims to boost entrepreuners”. Business Report. Available at www.iol.co.za/business-report/companies/endeavor-and-sa-sme-fund-lsu-programme-aims-to-boost-entrepreuners-3bd0f2cd-30d4-4884-a684-91ddd00a97f2
- Reuters. 2021, March 18. “South Africa launches fund to boost Black farming”. Business Report. Available at www.iol.co.za/business-report/economy/south-africa-launches-fund-to-boost-black-farming-6fd13ec8-f28c-493b-9e78-84c0d85ebef8
- Reporter. 2020, December 7. “Finfind releases 2020 SA SMME Covid-19 Impact Report”. Bizcommunity. Available at www.bizcommunity.com/Article/196/846/211235.html
- Guermond V. et al. 2020, July 21. “Microfinance loans could spell disaster in the time of coronavirus”. The Conversation. Available at https://theconversation.com/microfinance-loans-could-spell-disaster-in-the-time-of-coronavirus-140197
- Erasmus D. 2020, June 25. “Mboweni heeds industry calls to save the Land Bank”. Farmer’s Weekly. Available at www.farmersweekly.co.za/agri-news/south-africa/mboweni-heeds-industry-calls-to-save-the-land-bank/
- Reuters. 2020, June 16. “SA hopes to ease access to COVID loans amid low payouts”. Eye Witness News. Available at https://ewn.co.za/2020/06/16/sa-hopes-to-ease-access-to-covid-loans-amid-low-payouts
- BR Correspondent. 2020, June 16. “Skills development entrepreneur helps close SA’s youth skills gap”. IOL. Available at www.iol.co.za/business-report/entrepreneurs/skills-development-entrepreneur-helps-close-sas-youth-skills-gap-49412379
- Reporter. 2020, May 18. “Over 15 000 farmers approved for COVID-19 fund”. SA News. Available at www.sanews.gov.za/south-africa/over-15-000-farmers-approved-covid-19-fund
- Kriel G. 2020, May 8. “Crisis funding for farmers”. Farmer’s Weekly. Available at www.farmersweekly.co.za/agri-news/south-africa/read-the-8-may-digital-farmers-weekly-magazine-free/
- Hutchison A. 2020, May 4. “How South African stokvels manage their lending activities outside the courts”. The Conversation. Available at https://theconversation.com/how-south-african-stokvels-manage-their-lending-activities-outside-the-courts-135449
- Sishuba S. 2020, May 1. “More than 40 000 farmers apply for agri COVID-19 funding”. Farmer’s Weekly. Available at www.farmersweekly.co.za/agri-news/south-africa/more-than-40-000-farmers-apply-for-agri-covid-19-funding/
- Duma N. 2019, October 4. “55 KZN youth entrepreneurs awarded grants of over R70m”. Eye Witness News. Available at https://ewn.co.za/2019/10/04/55-kzn-youth-entrepreneurs-awarded-grants-of-over-r70m
- Kriel G. 2019, August 28. “Unique fund aims to generate 1 700 jobs over three years”. Farmer’s Weekly. Available at www.farmersweekly.co.za/agri-business/empowerment/unique-fund-aims-to-generate-1-700-jobs-over-three-years/
- Noemdoe D. 2019, August 6. “Give female farmers greater access to land and credit”. Food for Mzansi. Available at www.foodformzansi.co.za/give-female-farmers-greater-access-to-land-and-credit/
- Twenty (20) percent of the levies paid by different sectors is intended for transformation. The National Agricultural Marketing Council (NAMC)‘s Transformation Digest (9th issue – August 2019) looks at the progress thus far www.namc.co.za/wp-content/uploads/2019/08/Transformation-Digest-9-Edited-August.pdf
- Mathe, K. 2019, June 18. “Can financial inclusion be the key to end poverty?” Personal Finance. Available at www.iol.co.za/personal-finance/can-financial-inclusion-be-the-key-to-end-poverty-26590443
- Dludla, S. 2019, June 13. “Barloworld Mbewu launched with R30m fund for social entrepreneurs”. IOL. Available at www.iol.co.za/news/south-africa/eastern-cape/barloworld-mbewu-launched-with-r30m-fund-for-social-entrepreneurs-26156010
- Reporter. 2019, June 10. “Apply for agricultural funding in NW”. SA News. Available at www.sanews.gov.za/south-africa/apply-agricultural-funding-nw
- Van der Westhuizen, A. 2019, May 22. “Integrated financing for smallholder farmers”. Farmer’s Weekly. Available at www.farmersweekly.co.za/opinion/by-invitation/integrated-financing-for-smallholder-farmers
- Metembi, L. 2019, April 23. “The alphabet soup that stifles rural development: A new financing model is needed to help agriculture develop rural communities”. Food for Mzansi. Available at www.foodformzansi.co.za/column-the-alphabet-soup-that-stifles-rural-development/
- Dean, S. 2019, March 6. “Grain SA initiative to help farmers get financing”. Farmer’s Weekly. Available at www.farmersweekly.co.za/agri-news/south-africa/grain-sa-initiative-to-help-farmers-get-financing/
- Reporter. 2018, November 9.”Banks urged to plough into Africa’s agribusiness”. SA News. Available at https://www.sanews.gov.za/south-africa/banks-urged-plough-africas-agribusiness
- Sihlobo, W., Qobo, M. & Boshoff, T. 2018, October 22. “Granting title deeds is too simplistic an answer to the land issue”. Business Day. Available at https://www.businesslive.co.za/bd/opinion/2018-10-22-granting-title-deeds-is-too-simplistic-an-answer-to-the-land-issue/
- Find the article “Seed Capital Funding For South African Start-Up Businesses” at www.entrepreneurmag.co.za which discusses seed funding and provides links to local seed funders – 4Di Capital, Technology Innovation Agency, Grovest, Business Partners, Seed Engine, Edge Growth and Kalon Venture Partners.
- Find the article “6 challenges to financial inclusion in South Africa” by the World Economic Forum on www.ewn.co.za. These are listed as (1) Perceptions of high fees limits the usage of banking services (2) There is a general sense of mistrust in bank’s motives (3) Concerns of fraud negate the convenience of cashless transactions (4) People value a sense of community with trusted advisors (5) Banks require too much paperwork and response times are slow (6) A significant amount of business is conducted informally.
- Manlan, C. 2017, May 18. “Africa should follow in India’s footsteps towards a cashless economy”. Eye Witness News. Available at
- Find the article “FarmDrive: De-risking lending to small holder farmers” on www.howwemadeitinafrica.com. It is about a digital bookkeeping platform in Kenya. Financiers are able to use credit profiles set up to determine the creditworthiness of farmers.
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