Senwes to offer loans to qualifying black farmers

On August 2020, the Competition Tribunal approved the merger of Senwes Group of Klerskdorp and the Suidwes Group of Leeudoringstad.

According to Senwes, part of the agreement was to enhance their current offering to black emerging farmers.

“Senwes will accordingly provide production loans to emerging farmers to the value of R 20 million annually, in terms of its credit policy. These loans will be allocated over a period of three years and will amount to R60 million in aggregate.”

The group said applications would be limited only to farmers who were farming in the Senwes and Suidwes operational areas.

Details of the qualifying criteria are still sketchy and it is unknown whether such provision of loans will follow those of commercial banking.

“Finance in this regard, will be extended to qualifying farmers on commercial credit terms (payment of interest, security requirements and fixed re-payment terms, etc).”

The rise of corporations offering agricultural loans to emerging farmers was an interesting development. Commercial banks stringent requirements often discriminated emerging farmers.

Dr Mokoko Sebola from the University of Limpopo, painted the challenges emerging farmers faced when accessing finance especially through banks, in his research analysis title ‘financing emerging black farmers in South Africa.’

He said banks only looked at the individual’s ability to repay the loan as well as a high percentage of a deposit to buy land as banks didn’t provide a 100% loan for buying land for agricultural purposes.

“For example, a 30% deposit may be required from an applicant for a loan to buy a farm – a percentage that is highly unlikely to be afforded by an emerging black farmer in South Africa.”

Eligibility criteria was impossible for black farmers as they lacked ownership of assets to in order to secure loans.

Senwes on the other hand said it was committed to providing production loans for grain and cattle farming to qualifying black farmers subject to its credit policy. It also offered various finance products that included medium term loans.   

Applications for qualifying farmers close on 30 September 2020 Senwes said.

Photo credit: Crowdfunding Software

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