A blended finance scheme for selected Eastern Cape-based agricultural businesses is driving the growth, competitiveness and productivity of 30 agri-entrepreneurs who have received over R50m in funding since 2023.
EC Development Corporation head of enterprise finance and business support Zinzile Nkonki said the ECDC, in partnership with the EC Rural Development Agency, launched the Agri-Blended Finance Scheme to promote access to finance for agri-businesses.
Carefully analysed “de-risked” loans are designed to avoid non-repayment risk.
Given the high-risk world of the agriculture sector it is a useful instrument in an environment where agriculture funding is mainly directed at established commercial agricultural enterprises,”Nkonki said.
The scheme disbursed the money to qualifying agricultural businesses as a part loan and part incentive.
The 30 funded farmers are from the Amathole, Chris Hani, Sarah Baartman, OR Tambo and Alfred Nzo districts and the Nelson Mandela Bay and Buffalo City metros.
Products produced include beef, dairy, chickens, sorghum, cannabis, yellow and white maize, macadamia nuts, as well as seasonal crops such as spinach and cabbage.
Nkonki said an overwhelming response resulted in many farmers not receiving the funding they applied for.
The scheme funded input costs, production and processing equipment, as set out in recipients business plans.
Included is fertilisers, seeds, irrigation, mechanisation, livestock feed and other agricultural operations activities against which a clear income stream will be derived.
It provides asset-based finance for tractors, vehicles, agricultural machinery, and other movable assets required in agricultural operations.
LM Holdings has 15 Idutywa-based co-operatives farming sorghum, white maize, soya beans and other grains.
It received R3.9m in incentives and a R1.9m loan. The business model involves partnering with communal landowners and smallholder farmers to commercialise the use of their land.
LMH used the funds to acquire production inputs, a planter, boom spray and harvester.
This season, LMH cultivated over 1500 ha in seven Ngxakaxa cooperatives, planting sorghum, soybean, sunflower, white and yellow maize,” Nkonki said.
Jay Jay Farming is in Mphuthi in Mthatha. Founded by locals Mzimasi Jalisa, 29, and Siphe Joyi, 31, it received R1m in incentive finance and a R1.1m loan, enabling crop production inputs, infrastructure such as a storage shed, and a useful stash of working capital.
Over 200ha were planted with white maize and 130ha with soya beans. JJF employs 15 permanent workers and 15 seasonal workers. The produce is sold to Mthatha, Ngcobo and Kokstad retailers, animal feed companies and local communities.
Mthatha's EC Poultry received R1,026m, with R320,367 of it being a loan.
The enterprise rears chickens and cultivates vegetables.The funds purchased feed, medication and vaccines, as well as a solar-powered borehole, storeroom and fencing.
A storeroom is being constructed, and over 3.5ha has been fenced.
The business has access to markets for eggs, while cabbages are sold to local hawkers and residents.
Daily Dispatch
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