Mzansi’s troubled Land Bank is determined to turn over a new leaf and to reposition itself on South Africa’s agri landscape. Non-executive chairperson Thabi Nkosi admits that the bank has been in “intensive care” for years, but says it is finally on a path of recovery.
Nkosi was speaking during a panel discussion at the Bureau for Food and Agricultural Policy (BFAP) 2022-2031 outlook presentation on Wednesday (17 August 2022). She emphasised that the institution was in a rebuilding phase and that it now plans to focus not only on commercial farmers, but developing farmers as well..
The state-owned South African Land and Agricultural Development Bank, as it is officially known, had been struggling to turn a profit in recent years, which eventually landed them on a long list of state-owned entities that are barely coping financially.
“Focusing on the developmental cohort is what is going to take us to the next level,” Nkosi told the audience during the discussion. “When you speak of developing farmers, one thing that they will always lament is a lack of finance. It is one of the big issues that emerging and developing farmers talk about year in and year out.”
According to her, developing farmers have not been getting the support they should have received from the bank, and that the bank’s leadership intends to correct this.
“We’ve sat in sessions and heard farmers’ issues with funding, but we have not really put our money where our mouths are as the Land Bank. We’re still not seeing funding flowing to those cohorts of farmers we want to develop, and the question is: who needs to do it and why are we not doing it?”
The bank has placed much of its focus on providing financial services to the commercial farming sector and to agri-business in the past. The bank is currently scrutinising its existing funding model and says it is moving closer to the movement of agricultural policies.
“We have engaged the department of agriculture [land reform and rural development] and they have really cracked the whip in directing us on where the master plan is going. That is where we need to focus as the institution. That is what you will be seeing from us in the coming months.”
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Lank Bank’s ‘aggressive’ debt recovery
The bank recently landed itself in a negative light after farmers came forward, claiming that the bank had a heavy-handed approach to its debt recovery processes. Farmers took to social media claiming that the bank and its legal representatives have been aggressively liquidating clients that have defaulted on their loan repayment obligations.
The bank has, however, denied this, saying that there were no evidence to support allegations that the bank or its legal representatives have acted illegally or unethically.
“We will continue to act in the interest of all its stakeholders, including our clients, to recover debts owed to it in accordance with the applicable laws,” the Land Bank said in a statement.
“The bank’s debt recovery activities and securing of its assets are always undertaken through applicable court processes and are carried out in the interest of maintaining the entity’s financial sustainability to ensure the effectiveness of Land Bank for all farmers,” it added.
Clients are encouraged to contact the bank if they have trouble paying off their debt, in order to try and find solutions in partnership with the bank.
Aligning with the signed master plan
Meanwhile, according to the director-general of the department of agriculture, land reform and rural development, Mooketsa Ramosodi, the new Land Bank board was taking the right direction.
Ramosodi said agricultural stakeholders needed to work together to ensure that emerging and small-scale farmers benefited from the blended finance module and Land Bank’s services.
“I think, slowly but surely, we are moving. However, we need to ask ourselves why there are no graduation of farmers from development to commercial. That is why we need all hands on deck and [why we] must work together.
“The [Agricultural and Agro-processing] Master Plan has given us a dream and we all need to work towards achieving that dream,” he said.
Nkosi said she hoped to work with all stakeholders in order to achieve the goal of providing financing to upcoming and developing farmers.
“We are working on repositioning our brand and aligning our plans with the master plan, and ensuring that we have a higher impact in this sector.
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