Infrastructure Improvement Fund
In a drive to improve access to agricultural finance in rural areas, the Land Bank announced the appointment of the financial services unit of the National Emergent Red Meat Producers Organization, or NERPO, as an intermediary to manage an infrastructure fund for small-scale farmers. The fund would be the bank’s vehicle to reach out to farmers in rural SA. To find out more about the Infrastructure Improvement Fund we spoke to Angel Nyathela from NERPO
Nerpo to run fund for small-scale farmers
Published: 2012/05/24 07:59:52 AM
IN A drive to improve access to agricultural finance in rural areas, the Land Bank announced the appointment yesterday of the financial services unit of the National Emergent Red Meat Producers Organisation (Nerpo) as an intermediary to manage an infrastructure fund for small-scale farmers.
The fund would be the bank’s vehicle to reach out to farmers in rural SA as part of an initiative suggested by the three ministries responsible for the bank’s mandate: the Treasury, agriculture, forestry and fisheries and rural development and land reform.
The Land Bank does not have enough branches in rural areas.
The new credit facility known as the Nerpo Farm Machinery and Infrastructural Improvement Fund, will be administered by Nerpo Financial Services, a subsidiary of Nerpo Group.
\"It will seek to improve access to agricultural finance by small-holder farmers at fixed low interest rates estimated at only 4% for infrastructural improvements,\" said Nerpo Group MD Aggrey Mahanjana,
He said agricultural infrastructure that was now eligible for special funding included among others, farm machinery, implements, fixed improvements, irrigation facilities, boreholes and water reservoirs.
Nerpo Financial Services had earmarked an initial amount of R75m for smallholder farmers.
\"Although we established a financial service to fight the struggle of access to finance for small-scale farmers, we did not have the capacity to borrow money from big financial institutions. So we negotiated with the Land Bank, which needs our facilities that exist in every corner of rural SA, to secure funds for our members,\" said Mr Mahanjana.
In November, Standard Bank ’s director of agricultural banking Willie du Plessis suggested that since the Land Bank had much stronger mandate and support from government it had to proactively look into development farming.
He said the risks and transaction costs in development farming were much too high for commercial banks shareholders and stakeholders — a situation that presented opportunities for the Land Bank.
Land Bank CEO Phakamani Hadebe said the partnership with Nerpo would revive the bank’s marriage with the emerging sector.
\"Through this intervention we are determined to fast-track the commercialisation of the emerging farmers in a manner never seen before,\" Mr Hadebe said.
\"Smallholder farmers will cut loan costs, have their risks managed, and still gain access to after-care management, farming expertise and off-takers for products,\" he said.
INFRASTRUCTURE FUND IS A CATALYST
FOR FARMER SUPPORT AND DEVELOPMENT
18 May 2012
On Wednesday, 23 May 2012, NERPO Financial Services (Pty) Ltd, a subsidiary of NERPO Group of Companies, will join hands with the Land and Agricultural Development Bank of South Africa (Land Bank), to officially launch a new credit facility known as NERPO Farm Machinery & Infrastructural Improvement Fund. This intervention is believed to be a catalyst for growth and development of small-holder farmers. The event will take place at the Sheraton Hotel in Pretoria at 07h00.
The Fund is the farmer support and development initiative that seeks to improve access to agricultural finance by small-holder farmers. It offers agricultural finance at arguably unmatched 4% fixed interest rates for infrastructural improvements. The Agricultural Infrastructure which is eligible for funding include amongst others, farm machinery, implements, fixed improvements, irrigation facilities, boreholes and water reservoirs. Small-holder farmers can apply for loans ranging between R10 000 (ten thousand rand) and R1 000 000 (1 million rand). NERPO Financial Services (Pty) Ltd has been appointed by Land Bank as an intermediary to on-lend an initial R75 million to small-holder farmers.
We are humbled to have joined hands with Land Bank to support the emerging sector. This joint initiative is a true reflection of NERPO vision to create an enabling environment for commercialization of small-holder farmers, by among other things, improving the accessibility of agricultural credit facilities so as to improve their competencies as commercial farmers. We see it as a catalyst to growth and development of small-holder farmers said the Group Managing Director of NERPO, Mr. Aggrey Mahanjana.
As a key partner in the initiative, Mr. Phakamani Hadebe, the Chief Executive Officer of Land Bank, will deliver a keynote address at the event to mark the official launch of the Fund.
As South Africa Agricultural Development Partner of choice, we have made strides in developing tailor-made credit packages for all our clients, small-holder farmers in particular. Our partnership with NERPO is the one that, we believe, will revive our marriage with the emerging sector. Through this intervention we are determined to fast-track commercialization of the emerging farmers in a manner never seen before said Mr. Hadebe.
Among the industry stakeholders who have been invited to attend and support the event, will be representatives of small-holder farmers organizations, Directors-General of Rural Development and Land Reform, Agriculture, Forestry and Fisheries, Heads of Agribusiness Division of Commercial Banks, and HoDs of Provincial Departments of Agriculture.
To find out more about the Fund go to http://www.nerpo.org.za