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Finance for new farmers and SMMEs


For small farmers and other small entrepreneurs, access to finance is a crucial part of being in the game. Farmers all over the world borrow money for seed, fertiliser and other technologies or inputs. These are investments into the business so that it is able to generate products to sell. Finance is also necessary to market the produce. All of this requires money – before the farmer has earned a cent!

You need money to create money.

This page is a sketch, by no means conclusive, of the financial assistance to small, medium and micro-sized enterprises (SMMEs) in the country, with an emphasis on those touching on the agricultural value

Instead of talking about creating five million jobs … [government] should be saying we are going to create one million new enterprises by then – in other words one million new entrepreneurs with the freedom to do their own thing within an open, inclusive economy. If each of them hires on average four people, you have five million new jobs.


Meanwhile, very few captains of industry are helping to expand the space and provide support for entrepreneurs. Educational institutions have not woken up to the fact that the game of work has changed and, as such, they are still educating their students for the job market that existed 50 years ago.


Source: Clem Sunter

Credit from commercial banks

Only credit grantors that are registered with the National Credit Regulator (NCR) may grant credit. Visit to find out more, including information and tips, debt counselling etc.

Farmers who want to establish or expand their farming operations can obtain finance from commercial banks. It is, however, important that they understand the terms and conditions of credit, e.g. what credit is and repayment requirements.

What is credit and why do you need it?

Credit is money borrowed from someone or from a bank by agreement with the promise to pay it back at a later date, with or without interest.

Commercial banks grant credit to farmers for various purposes e.g. for equipment, vehicles, land, livestock, irrigation equipment, water pumps, etc. The bank will want to know how the credit is going to be used and what your financial position is (assets and liabilities). Your bank will want to know this in order to assess your ability to generate income and pay back the loan. The bank will look at your:

  • assets and liabilities (financial standing)
  • present and expected income (cash flow)
  • risks involved and how you plan to cover them
  • knowledge of the industry in which you want to get involved

Ask your financial advisor or extension officer or to assist you to compile this information. The extension officer is a person who works for the Department of Agriculture in your area and who is trained to assist farmers in agricultural matters.

When and how much can you borrow?

  • Know the purpose for which you are borrowing money – to improve the performance of your farming operations.
  • Do not apply for credit that will generate too little income to cover the interest and capital (money borrowed) repayments.
  • Therefore, the expected net income (income left over after all expenses have been deducted, except tax and interest) will give a good indication of how much debt the project will be able to carry.
  • When applying for credit, make sure that your debt is not more than 30% of your current assets and 25% of the expected income.

Repaying the bank

Before any commercial bank can grant a loan, it determines whether your income exceeds your costs to such an extent that there will be enough money to repay the loan and to cover household expenses.

The bank will ask for a collateral or security for the loan. A collateral or security is property pledged as security for the loan. Should you fail to repay your loan, the bank will repossess your property and sell it to realise its security.

Property which is presented as collateral must meet certain requirements:

  • It must be identifiable and not perishable.
  • It must be in a saleable condition.
  • The bank must be able to estimate its market value.
  • It must be your own property and preferably not immovable.

Repaying the loan within a given time limit will improve your credit worthiness and credibility with the bank and also save on interest charges.

The best incentive to repay a loan is to have access to future loans.

How to apply

Once you have identified why you have to borrow money, you can go to your nearest bank and fill in application forms. Your application should contain all the relevant information because it forms the basis for negotiations with the bank manager.

After submitting the forms, the bank will call you in for an interview. (You are allowed to take someone who knows your business well with you, if you like).

During the interview you will be given a chance to motivate your proposal, negotiate the possible loan terms and also to develop a good business relationship with your bank manager – prepare the presentation of your loan request beforehand.

The bank manager will tell you after the interview whether your application was successful or not.

See the “Providers of financial services” page for contact details of the commercial banks.


The term “Emerging Farmer” is commonly applied both to farmers who are emerging in terms of scale and to farmers who are emerging in terms of lack of skills.


Farmers who are emerging in terms of scale battle with problems such as access to markets, quality inputs, land and finance. These farmers are no riskier than other categories of farmers. Rather, it is the environment in which they operate that brings increased risk. The business of a tomato grower in Giyani is obviously riskier than that of ZZ2 because the scale is smaller and market access is not there. But in terms of production techniques, the Giyani grower is equal to any top farmer.


These farmers need a financing programme that includes support structures. For example, if such a farmer can be assisted to acquire a contract to supply a large retailer, this contract can be ceded to us in security for his or her loan. But it is also important to look beyond retailers for off-take agreements, especially as there is large untapped potential in informal markets.


Source: Andrew Makanete

Role players: government and state-owned

Emerging businesses often find that these institutions offer services that are not available to them by commercial banks.

The Development Bank of Southern Africa (DBSA) provides finances to projects related to the development of infrastructure. If your proposed venture focuses on the development of infrastructure you are entitled to apply for funds from this bank. See

If you are exporting, the Export Credit Insurance Corporation of South Africa (ECIC) might be able to help. The ECIC evaluates export credit and foreign investment risks and provides export credit and foreign investment insurance cover on behalf of government. Visit

All government departments are tasked with growing their sphere of the economy and have (access to) various grants and funding mechanisms. Find a list of these departments at The Department of Small Business Development (DSBD) is a first stop. See Enquire about its Township and Rural Enterprises Programme (TREP). Other programmes include Business Viability Programme and the Co-Operative Development Support Programme (CDSP). The Department of Trade,  Industry and Competition (the dtic) has a number of financial incentives for businesses (take the “Financial assistance” option at The Department of Agriculture, Land Reform and Rural Development (DALRRD) runs the Blended Finance Scheme, AgriBEE Equity Fund programme, Land Redistribution for Agricultural Development (LRAD), and Micro-agricultural Financial Institution of South Africa (MAFISA), for example. Visit

Various financial incentives offered by government can help the entrepreneur in agriculture.  Take a look at

The Independent Development Trust operates largely within the realm of the second economy, supporting government to implement developmental projects. Visit Provincial offices contact details are available on the website.

The Industrial Development Corporation (IDC) finances initiatives in different sectors including agriculture and agro-processing. Clients must show assets and/or a certain amount of savings. Visit

The Jobs Fund offers backing to established companies which want to expand existing operations which will employ people. See

The Land Bank provides finance to all sectors of the agricultural economy and agri-business. If you are involved in these activities you can apply for finance. The Blended Finance Scheme (BFS) looks “to commercialise development farmers”. For more information on services visit the Land Bank website Contact Bethlehem 058 307 5200 Bloemfontein 051 404 1400 Cape Town 021 974 2200 Centurion 012 686 0500 Cradock 048 801 8900 Douglas 053 298 1126 East London 043 706 8600 Ermelo 017 811 0800 Gqeberha 041 392 1200 Kroonstad 056 216 6200 Lichtenburg 018 632 7700 Mbombela 013 754 2400 Pietermaritzburg 033 845 9600 Polokwane 015 287 9840 Rustenburg 014 590 6900 Upington 054 338 8400 Vryburg 053 928 1700 Vredendal 027 213 1045 Vryheid 083 274 4223 Worcester 023 342 1756

Local Economic Development (LED) agencies is one measure available to district municipalities to support SMEs and to encourage investment. Enterprise Ilembe, situated between Durban and Richard’s Bay in KwaZulu-Natal, is one such organisation. Read about it at or

National Development Agency (NDA) has the mandate to “eradicate poverty by granting funds to civil society organisations that implement developmental projects in all provinces”. Find contact details for provincial and district offices on the website,

The National Empowerment Fund (NEF) seeks “to support black enterprise development in South Africa’s industrial value chain, as well as act as a catalyst for accelerating job creation in line with government’s New Growth Path”. See

The National Youth Development Agency (NYDA) can be contacted at 087 158 6345 / 5738. Find contact details of provincial and district offices on the website

Provincial government departments also run programmes. Visit the websites of provincial departments tasked with economic development for an idea of what is on offer. What happens in your province?

Provincial development agencies – e.g. the Limpopo Economic Development Agency, North West Development Corporation, Gauteng Growth and Development Agency (GGDA) etc – give financial assistance to co-operatives and small businesses. Find details of provincial bodies on the “Providers of financial services” page.

Small Enterprise Development Agency (SEDA) is an agency of the Department of Trade and Industry. SEDA has offices throughout the country to help the SMME with business plans, company registration, proposals for funding and more. We provide phone numbers for the provincial head office below. The website gives contact people, email and physical addresses. Visit

  • Eastern Cape: 043 706 6700/1/2/3 On the website find contact details for the branches at Mount Ayliff, East London, Queenstown, Gqeberha and Mthatha.
  • Free State: 051 411 3820 On the website find contact details for the branches at Fezile Dabi, Lejweleputswa, Mangaung, Thabo Mofutsanyana and Xhariep.
  • Gauteng: 011 408 6520/6528 On the website find contact details for the branches at Ekurhuleni, Johannesburg and Tshwane.
  • KwaZulu-Natal: 031 277 9500 On the website find contact details for the branches at Newcastle, Ethekweni, Ixopo, Port Shepstone, Pietermaritzburg, Ladysmith and Richard’s Bay
  • Limpopo: 015 287 2940 On the website find contact details for the branches at Polokwane, Tzaneen, Groblersdal, Thohoyandou and Mokopane.
  • Mpumalanga: 013 755 8730 On the website find contact details for the branches at Mbombela, Bushbuckridge, eMahahleni, Malelane and Secunda
  • North West: 014 591 7900 On the website find contact details for the branches at Brits, Klerksdorp, Mahikeng, Rustenburg and Vryburg
  • Northern Cape: 053 839 5700 On the website find contact details for the branches at Kimberley, Kuruman, Springbok, De Aar and Upington.
  • Western Cape: 021 487 3640 On the website find contact details for the branches at Atlantis, Beaufort West, Bellville, Cape Town, George, Hermanus, Knysna, Mossel Bay, Oudtshoorn, Stellenbosch, Swellendam, Vredenburg and Worcester.

The IDC’s small business development agency is the Small Enterprise Finance Agency (SEFA). See for information on the different offerings. Regional office contacts: Eastern Cape East London 043 721 1510, Gqeberha 041 391 6200/6201 Free State Bloemfontein 051 436 0150 Gauteng Parktown 011 067 6400, Riversands (Diepsloot) 011 067 6450 KwaZulu-Natal Durban 031 811 1950 Limpopo Polokwane 015 817 2370 Mpumalanga Nelspruit 013 755 3923 North West Rustenburg 014 813 0620 Northern Cape Kimberley 053 832 2275 Western Cape Cape Town 021 418 0126

Thusong Service Centres provide small business advice and development. See

EASTERN CAPE Bisho 040 609 6009 East London 043 722 2602/9

  • On the website find contact details for: Centane Thusong Service Centre, Cofimvaba Thusong Service Centre, KwaNophoyi Thusong Service Centre, Qunu Thusong Service Centre, Sterkspruit Thusong Service Centre, Tombo Thusong Service Centre, Viedgiesville Thusong Service Centre

FREE STATE Witsieshoek 051 403 3286, 051 405 3891 Bloemfontein 051 448 4504

  • On the website find contact details for: Kopanong Thusong Service Centre, Mohokare (Zastron) Thusong Service Centre, Namahadi Thusong Service Centre, Phiritona Thusong Service Centre

GAUTENG Marshalltown 011 355 6034 Johannesburg 011 834 3560

On the website find contact details for: Ga-Rankuwa Thusong Service Centre, Hammanskraal Thusong Services Centre, Kagiso Thusong Service Centre, Khutsong Thusong Service Centre, Mafatsane Thusong Service Centre, Mamelodi Thusong Service Centre, Maponya Urban Mall Thusong Service Centre, Muldersdrift Thusong Service Centre, Orange Farm Thusong Service Centre, Ratanda Thusong Service Centre, Sebokeng Thusong Service Centre, Soshanguve Thusong Service Centre, Tarlton Thusong Service Centre

KWAZULU-NATAL Pietermaritzburg 033 355 6188, 033 355 6568 Durban 031 301 6787

  • On the website find details for: Archie Gumede Thusong Service Centre, Bamshela Thusong Service Centre, Belgrade Thusong Service Centre, Bergville Thusong Service Centre, Bhomela Thusong Service Centre, Biyela Thusong Service Centre, Bulwer Thusong Service Centre, Driefontein Thusong Service Centre, Dududu Thusong Service Centre, Dukuza Thusong Service Centre, Ekuvukeni Thusong Service Centre, Highflats Thusong Service Centre, Imbabazane Thusong Service Centre, Impendle Thusong Service Centre, Inhlazuka Thusong Service Centre, Jozini Thusong Service Centre, KwaMadlala Thusong Service Centre, KwaMdakane Thusong Service Centre, KwaNzimakwe Thusong Service Centre, KwaXolo Thusong Service Centre, Lindela Thusong Service Centre, Luwamba Thusong Service Centre, Malangeni Thusong Service Centre, Mapumulo Thusong Service Centre, Mbazwana Thusong Service Centre, Mondlo Thusong Service Centre, Port Dunford Thusong Service Centre, Tugela Ferry Thusong Service Centre, uMfolozi Thusong Service Centre, Umnini Thusong Service Centre, Umshwathi Thusong Service Centre

LIMPOPO Polokwane 015 294 7751, 015 291 4689

  • On the website find details for:  Babirwa Thusong Service Centre, Botlokwa Thusong Service Centre, Eldorado Thusong Service Centre, Fetakgomo-Atok Thusong Service Centre, Mabatlane (Vaalwater) Thusong Centre, Madimbo Thusong Service Centre, Makhuva Thusong Service Centre, Makuya Thusong Centre, Mapela Thusong Service Centre, Mapodile Thusong Service Centre, Maruleng Thusong Service Centre, Mokwakwaila Thusong Service Centre, Moletjie Thusong Service Centre, Mtititi Thusong Service Centre, Relela Thusong Service Centre, Selwane Thusong Service Centre

MPUMALANGA Mbombela 013 766 6993, 013 753 2397

  • On the website find details for: Breyten Thusong Service Centre, Casteel Thusong Service Centre, Daggakraal Thusong Service Centre, Louisville Thusong Service Centre, Marapyane Thusong Service Centre, Matsamo Thusong Service Centre, Mbangwane Thusong Service Centre, Mpuluzi Thusong Service Centre, Phola Thusong Service Centre, Sakhile Thusong Service Centre, Siyathemba Thusong Service Centre, Tholulwazi Thusong Service Centre, Verena Thusong Service Centre, Wonderfontein Thusong Service Centre

NORTH-WEST Mmabatho 018 387 3456, Mafikeng 018 381 7071/7068

  • On the website find details for: Bokamoso/Jerico Thusong Service Centre, Kgetleng River Thusong Service Centre, Kgokgojane Thusong Service Centre, Leretlhabetse Thusong Service Centre, Losasaneng Thusong Service Centre, Monakato Thusong Service Centre, Tlakgameng Thusong Service Centre, Tshidilamolomo Thusong Service Centre, Victor Tong Thusong Service Centre

NORTHERN CAPE Kimberley 053 838 2718

  • On the website find details for: Augrabies Thusong Service centre, Colesberg Thusong Service Centre, Kgomotsego (Vanzylsrus) Thusong Service Centre, Manne Dipico Thusong Service Centre

WESTERN CAPE Cape Town 021 483 3839

  • On the website find details for: Beaufort West Thusong Service Centre, Bitterfontein Thusong Service Centre, Bredasdorp Thusong Service Centre, Ceres Thusong Service Centre, Citrusdal Thusong Service Centre, Clanwilliam Thusong Service Centre, Grabouw Thusong Service Centre, Hawston Thusong Service Centre, Hopefield Thusong Service Centre Ilingelethu Thusong Service Centre, Ladismith Thusong Service Centre, Laingsburg Thusong Service Centre, Langebaan Thusong Service Centre, Mossel Bay Thusong Service Centre, Murraysburg Thusong Service Centre, Oudtshoorn Thusong Service Centre, Paarl East Thusong Service Centre, Plettenberg Bay Thusong Service Centre, Prince Albert Thusong Service Centre, Riversdale Thusong Service Centre, Robertson Thusong Service Centre, Swellendam Thusong Service Centre, Thembalethu Thusong Service Centre, Unobuntu Thusong Service Centre, Van Rhynsdorp Thusong Service Centre, Vredendal Thusong Service Centre, Waboomskraal Thusong Service Centre

Youth Employment Service (YES) Community Hubs are part of a national strategy to “absorb unemployed youth, ignite local economies and promote domestic markets”. The first of a planned 100 such hubs was opened in Tembisa in 2018. See the news report. Visit the YES website at


When it comes to financial assistance, the aim should be to help beneficiaries become self-sufficient. Farming is a business just like any other, and if you want to farm you have to start thinking like a businessperson. I think loans, rather than grants, would do more to reduce poverty and generate value-added wealth. If farmers should get anything for free, it’s training [i.e. it is training which will lead to success, not being given money].


Source: Peter Mashala

Business and other role players

Role players

Note: Click to expand the headings below. To get a free listing on our website like the ones below, visit here for more information or place your order hereDisclaimer: The role player listings are not vetted by this website.

Zimele – The Zimele fund by Anglo American is an initiative to assist historically disadvantaged South Africans to own and run their businesses. Zimele provides loans and also teaches essential business skills.
AgriSeed Capital – Do you qualify for the incubation and business support programme?
Business Partners – Business Partners has a range of support services to the entrepreneur. The company considers financing application up to R50 million for SMEs. It does not support farming, but may be able to help if you are looking to supply agricultural inputs or doing some form of processing.
South African SME Finance Association – “Encouraging transparent and responsible lending”
Agricultural Business Chamber (Agbiz) – Agbiz has held workshops before on finding ways to provide sustainable funding to emerging farmers. ABSA, FNB, Standard Bank and Nedbank are all members of Agbiz.
Resonance Institute of Learning –> Training courses include financial and entrepreneurial skills, HIV/AIDS in the workplace, conflict management, and more.
University of South Africa (UNISA) – Centre for Business Management The Centre offers Short Learning Programmes (SLPs) that prepare learners for the business world in a quick and effective manner.
Trade & Industrial Policy Strategies (TIPS) – TIPS is a research organisation which has a focus on economic inclusion.
ANDISA Agri – Services include managing “change of control” transactions and land reform transaction advisory, business planning and feasibility studies.
South African Business Resources Institute (SABRI) – SABRI nurtures promising SMEs through the start up and growth phases of their business by: (i) Strengthening the internal capacities, systems and processes (ii) Encouraging entrepreneurship and facilitating skills development (iii) Co-ordinating access to resources required to grow a business.
Seriti Institute – Training for communities in financial management and other programmes
BeyondCOVID – Organising small businesses into collectives and then partnering them with established corporates to achieve the economies of scale required to access profitable markets, funding and supply chains.
National Credit Regulator (NCR) – Prevents abuse by lenders of credit (e.g. exorbitant interest rates, unfair blacklisting)

Further reference:

Find details of various regulatory bodies on the “Providers of financial services” page.

The Agricultural Colleges provide short course training in financial skills. Find contact details on the Agricultural education and training page.

The B-BBEE scorecard allows rewards companies whose financial contributions favour Black people. Read more on the “AgriBEE” page, or contact one of the role players listed there.

Various bodies representing business might be able to assist. Some have an agriculture/food desk. Usually though they will point you to organised agricultural bodies like AFASA and AgriSA (see the “Organised agriculture“ page). Nevertheless, the reader is welcome to give organisations like the Foundation for African Business & Consumer Services (FABCOS) and the Black Business Council a try.

The commercial banks have specialist SME divisions, providing finance for qualified entrepreneurs. Contact the banks or visit their websites to find out about their products and services, and their criteria to obtain finance. Most banks also participate in credit guarantees. The Banking Association South Africa represents this group. See

Co-operative banks are a possibility. Refer to the page on co-operatives.

Development finance institutions (DFIs) are listed under the previous heading. These are institutions like the IDC, Land Bank etc.

Foundations working with industry associations (or on their own) can be a source of agricultural finance. Examples are Coca-Cola Beverages South Africa’s (CCBSA) Mintirho Foundation, which has partnered with the South African Farmers Development Association (SAFDA) on several occasions; and the SAB Foundation.

Industry associations might have knowledge of funds for role players in their sectors. These associations are listed in the various crop and livestock chapters. Some of these associations might be actively involved in sourcing funds. The National Emergent Red Meat Producer’s Organisation (NERPO), for example, runs farmer support programmes called “NERPO-Livestock Credit Scheme”(NLCS) and Farm Machinery and Infrastructure Credit Fund.  CANEGROWERS (see sugarcane page) or Akwandze Agricultural Finance – 013 791 1000 – would be able to tell you about the Khula-Akwandze Fund (KAF) for small-scale sugar farmers. Also available is funding from Umthombo Agricultural Finance (Umthombo) – speak to the South African Sugar Association (SASA). Hortfin is a R600 billion, special purpose development financing vehicle established by the deciduous, table grape and wine industries. The custodian of Hortfin is the deciduous fruit industry, supported by the Jobs fund and Land Bank. It targets mostly agri entrepreneurs from previously disadvantaged groups. Read more at

National Stokvel Association of South Africa (NASASA) Research by African Response shows some R44 billion is saved and accessed through stokvels (Rotating savings and credit associations). See also the Siyanda Sishuba article “Stokvel concept offers hope to young farmers” for Farmer’s Weekly.

Some pension funds like the Government Employees Pension Fund (GEPF) invest in the agricultural value chain. The GEPF has previously invested R2.3 billion in the agricultural sector.

Retail Finance Intermediaries (RFIs) are institutions that obtain loans from the state in order to loan the money to clients in their communities. Different RFIs have different target markets depending on their operations. RFIs also use the Credit Guarantee Scheme to access additional funds from participating banks. RFIs charge different interest rates depending on the risk involved in the application.

International business environment

Websites and publications

Included in the seventeen manuals on developing a co-operative at are ones like Developing a business plan (7), Financing your agricultural business (11) and Financial management (12). Find the full list on the “Co-operatives” page.

Watch the Nation in Conversation video (2023, May 17) “Financing models are changing rapidly: Is agricultural finance in need of a mindset change?” at

South Africa’s Enterprise and Supplier Development Landscape

Some media houses run magazines and newsletters for SMMEs. To see what is on offer from Entrepreneur Media SA, by way of example, visit

Read The SA SMME COVID-19 Impact Report (2020, November) at The Finfind South African SMME Access to Finance Report (2018) can be found at

Serame M. 2019. Factors Influencing SMEs’ Access to Finance in South Africa. Master’s dissertation. Available at

Groenewald, J.A., & Jordaan, A.J. 2012. Unlocking credit markets. In Unlocking markets to smallholders. Edited by van Schalkwyk, H.D et al. Wageningen: Wageningen Academic Publishers.

Find the guideline for funding agencies for aquaculture on DALRRD‘s Directorate Aquaculture and Economic Development pages at Many of the listed providers have funding programmes beyond aquaculture.

Patronage Politics Divides Us: A study of poverty, patronage and inequality in South Africa – research finds that a lack of start-up capital and official indifference to be common complaints among aspirant business people. Contact MISTRA (see previous heading).

Read about the Addis Ababa Action Agenda on sustainable financing at

Various agricultural and other projects looking for backing from investors can be found at

The first online platform for peer-to-peer lending (P2P) in South Africa is RainFin. Small businesses can access funding and investors typically get better returns than those offered by banks. See

Oji, C.K. 2015. Promoting Financial Inclusion for Inclusive Growth in Africa. Pretoria: South African Institute of International Affairs. Find the document at

It is not only individuals who struggle for shortage of capital. The World Bank’s “Global Financial Development Report 2015/2016: Long-Term Finance” looked at how shortage of capital has left underdeveloped countries struggling to grow their economies. Find the report at

Small Business Connect

SME South Africa


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