Unlocking the Fields: A New Push for Financial Inclusion in South African Agriculture

South Africa’s agricultural sector is a powerhouse, a critical pillar of food security and job creation. Yet, for many aspiring farmers, the path to growth is blocked by a persistent hurdle: access to finance. In a concerted effort to dismantle this barrier, Absa and the Agricultural Development Agency (AGDA) recently convened a pivotal roundtable, bringing together banks, policymakers, and farmers to move from identifying problems to building actionable solutions.

The central theme was clear: the current financing landscape is too fragmented. “Many programmes operate in silos,” stated Leona Archary, CEO of AGDA. She highlighted the critical need to bridge the gap between well-intentioned policy and the hard commercial realities faced by financial institutions and farmers alike.

The “Scale-Up” Gap: When Potential Meets a Paperwork Wall

A key challenge identified is the “scale-up gap.” As Dr. Langelihle Simela from Absa Business Banking explained, many new agripreneurs successfully self-fund their start-up phase but hit a wall when they are ready to expand. “Without appropriate financial statements or a track record… it’s challenging to present a credible case for financing,” she noted.

The journey from a small-scale operation to a formal, bankable business is steep. It requires moving from personal savings to attracting angel investors or venture capital, and finally, to qualifying for traditional bank loans. The missing link is often the structured support to help farmers navigate this progression.

More Than Money: Building a Supportive Ecosystem

The dialogue underscored that throwing money at the problem is not enough. Empowering farmers requires a holistic ecosystem of support.

Elder Mtshiza from the Department of Agriculture emphasized that farmers often lack more than just capital. They need “education, mentorship, coaching, [and] market intelligence” to succeed. This sentiment was echoed by Althea Discala of Discala Holdings, who pointed out that greenfield farms can take years to become profitable and need patient capital and less stringent requirements during this vulnerable phase.

A Collaborative Path Forward

Sanah Gumede of Absa reinforced that no single entity can solve this alone. “The task demands cooperation between banks, development finance institutions, government, private sector, large agribusinesses, and smallholder farmers,” she stated, highlighting that building trust between all these players is essential.

The roundtable concluded with a focus on tangible outcomes. Participants broke into groups to tackle specific issues like climate resilience financing and enterprise growth, with their recommendations set to directly inform the national Agriculture and Agro-Processing Master Plan (AAMP).

The message from the gathering was one of determined collaboration. By aligning public and private funding, wrapping support around capital, and building bridges across the value chain, there is a clear path to cultivating a more inclusive, innovative, and resilient agricultural sector for all South Africans.

{Source: Zawya}

Follow Joburg ETC on Facebook, Twitter , TikTok and Instagram

For more News in Johannesburg, visit joburgetc.com