Standard Bank, Africa’s largest financial services organisation by assets, has approved a series of zero-interest loans with zero initiation fees to help secure emerging farmers’ participation in the upcoming winter planting season. This forms part of the bank’s wider ambitions to support and develop small businesses in the country.
“After the onslaught of Covid-19, many small and micro farmers missed out on the 2020 winter planting season,” explains Julian Felix, Head: Products and Sectors, Standard Bank. “They were also stuck with excess produce as export market demand slowed and local retailers clamped down on supply chains to focus on major offtakers.”
Through its enterprise development programme, which focuses on empowering black-owned businesses in South Africa with financial support and guidance, Standard Bank established a lending solution for emerging farmers participating in the Timbali Agriculture Incubator Programme.
Based in Mpumalanga and Limpopo, Timbali has for the last 17 years provided mentorship and skills to smallholder commercial farmers. It aims to create sustainable wealth through a scalable model that identifies direct market opportunities.
“Timbali guides farmers through an intensive, six-month training and mentorship programme to develop the technical aspects of their operations. As an NGO that relies on government funding and lacks financial capacity, however, the incubator experienced difficulties in assisting its farmers with inputs for the upcoming planting season. This is where we, as Standard Bank, identified an opportunity to close the funding gap.”
As it stands, Standard Bank has approved low to no interest loans for sixteen emerging farmers who applied, had been through Timbali’s programme successfully and met the criteria developed, which, Felix says, allows the farmers to access working capital they would not ordinarily have under normal lending conditions. A number of farmers applied for the loan. Standard Bank is currently in the process of loan approvals for more farmers spanning commodities from vegetables to flowers.
Helping farmers to create self-sustaining operations
The loan will cover the farmers’ costs of planting between one to two hectares of vegetables ranging from tomatoes, butternut and green peppers. Meanwhile, Timbali, through its mentors, will assist with the technical skills to prepare the ground appropriately, ensure planting happens at the right time, manage the fertiliser and the entire farming process properly.
With a view of enabling the means to create self-sustaining farming operations, Standard Bank has committed to assisting these farmers over the next two to three planting seasons. It is also providing financial and business advice through one of its business development suppliers, J&R Accounting, to assist farmers with the financial and technical aspects of their operations.
The crops that are planted before the winter cold sets in are expected to harvest around August and September. At this time, they will be received by offtakers for delivery at major retailers including Woolworths, Pick n Pay and MultiFlora, among others.
Identifying and responding to a fundamental need: Support for emerging farmers
“As Standard Bank, our involvement in Timbali is about developing a new model for assisting smallholders and effecting social change in impoverished communities around the country. “Ultimately, it comes down to our purpose as an organisation: Africa is our home, we drive her growth. The communities in which many of these farmers are based face high levels of poverty and social insecurity. The produce grown will be received by not only offtakers but locals and feeding schemes, which will address the issue of food security and contribute to building the social fabric of our society.”
Eunice Judith Mathebula, one of the five farmers to receive the loan from Standard Bank, says: “At first, I was afraid and nervous about the proposal of the loan financing, but after Timbali explained the benefits to me, it was clear that this was indeed a great opportunity. The financing has enabled me to purchase production stock that I could never afford by myself: Seeds, fertilizers, chemicals and irrigation materials. With the financing from Standard Bank and technical support from Timbali, I see myself becoming a commercial farmer in the next coming five years.
Another emerging farmer, Zanele Lubisi, says that she was “shocked” at the news that she had been selected for funding support with zero interest from Standard Bank, after struggling to successfully secure a loan for many years. Lubisi says that with this loan, she has never been able to plant as many crops now as she did when she first started farming. “Finally, after many battles, I have the means to grow my business and access formal markets.”
Felix says that the market of emerging farmers is growing but we have identified that there is a large need for support and skills transfer from larger farming players with skin in the game. “With that in mind, the opportunity to support farmers in the Timbali incubator quickly found support within Standard Bank. The speed of execution was made possible by leveraging our expertise within both the agriculture sector and enterprise development to meet a fundamental need. This simply demonstrates the power of collaborating with different areas within the organisation and showing up as a well-organised team that solves for customer problems.”
He concludes by saying that “at Standard Bank, we are actively involved and deliberate about providing universal services – within banking and beyond – that will develop and grow small businesses owned by black citizens to create shared economic value for the country”.
