Transcript Document

LAND BANK – CELEBRATING 100 YEARS OF
FINANCING AGRICULTURE!
ASHOK SOOKLALL
AFC MANAGER
PIETERMARITZBURG/VRYHEID
KZN PROVINCE
The Land and Agricultural Development Bank of
South Africa (Land Bank) celebrated 100th
anniversary in 2012.
Landbank is a BANK which lends money to
farmers which have to be repaid. It is not a grant
funding organisation.
Land Bank is a specialist agricultural bank.
The mission of Land Bank is:
• To develop and provide appropriate products for commercial and
development clients.
• To leverage private sector investment into the agricultural sector. To
develop partnerships with intermediaries for on lending.
• To develop techniques for financing high-risk agriculture and new
business areas.
• To support programmes of the Ministry of Rural Development &
Land Reform and Agriculture by aligning the Bank's products with
these programmes.
• To contribute to rural development by linking up with government
structures and activities.
New beginning
• The new strategy of the Land Bank represents
an attempt to redirect the Bank to meet its
mandate in alignment with the Land Bank Act
Rural Development and Agrarian Reform
The Land Bank, as a rural and agricultural DFI
has a responsibility to support Government’s
efforts to increase access to land, provide
support for emerging farmers and raise rural
incomes.
Food security
Food production at all levels of agriculture
needs to be increased to feed South Africa, as
well as to maintain healthy export levels.
Land and agrarian reform
While gains have been achieved in land
redistribution and agriculture, major challenges
remain.
Development impact
A major challenge facing DFIs is their inability to
maximise their developmental impact.
Products and Services
For 100 years, the Land Bank has been the bank
of choice for the South African farming
community – and is still the only bank
specifically specialising in agricultural finance
solutions. Among its product are the following:
Mortgage Loans
-buy land, consolidate debt, and or other
purposes linked to agriculture.
Special Mortgage Loans for farmers who:
•Were previously denied the right to buy land
•Have the potential to become successful farmers
•Are historically disadvantaged and are first time
buyers of agricultural land
Medium Term Loans
•Farming equipment
•Implements
•Farming vehicles
•Livestock (cattle, goats, sheep, pigs and poultry)
•Improvement of structures or any other loose
farming assets
•Irrigation systems
Instalment Sale Finance
This credit finance provides an option for
farmers who want to buy movable farming
assets and equipment. The goods financed
constitute the primary security, and the Land
Bank remains the titleholder of such goods until
such time they are fully paid.
Instalment Sale Finance (Livestock)
The facility offers clients an opportunity to
purchase large breeding livestock (e.g. bulls,
cows). The latest animal identification
technology to micro chip the animals is also
offered.
Establishment Loans
The Land Bank provides establishment loans to
farmers for perennial crops.
- Sugarcane
- Citrus
Short term (seasonal) loans - Production
Short-term loans are tailored to meet important
financing needs in the agricultural production
cycle, ie input costs
• THREE DEPARTMENTS
• B&CB – BUISNESS AND CORPORATE BANKING
• RCB – RETAIL COMMERCIAL BANKING
• REM – RETAIL EMERGING MARKETS
REM – Background
The Land Bank’s objectives include: Increased
food security, reduction in poverty and support
for rural development.
Land Bank committed itself to addressing the
challenges in the Black emerging agricultural
segment and has established the Retail
Emerging Markets(REM) unit to focus primarily
on this market segment
The REM business aims to assist black emerging
farmers to become established retail farmers
through the provision of tailored development
financing solutions.
REM CUSTOMER PROFILE
• Black emerging farmers
• Active in primary agricultural sector
• Lack of traditional forms of security
• Scale of operations is too small
• Insufficient access to resources
• Relative lack of skills to sustain a farming
enterprise
• Clients can be individuals, trusts and other
communal entities
REM FINANCING :
BASED ON A STEP UP SYSTEM, STARTING AT A
LOW INTEREST RATE OF AROUND 4%
INCREASING EVERY YEAR TO MOVE FARMER
FROM EMERGING TO COMMERCIAL.
GEARING FARMERS TO BE ABLE TO STAND ON
HIS OWN AFTER A 3/5 YEAR PERIOD.
CEILING OF R3m DEPENDING ON TYPE OF
ENTITY AND COMMODITY.
CONTACT DETAILS
Kasthuri Nunkumar
Mark Mckee
- 071 897 2405
- 083 566 2038
Thank you
Thank you