New funding hope for “unbankable” farmers

There is hope for emerging farmers in the Eastern Cape who have been turned down by mainstream financial institutions.

Following the establishment of the Eastern Cape Rural Development Agency (ECRDA), they now have a reasonable chance of getting loans at lower interest rates.

The agency’s main responsibility is to fund farmers who have been rejected by main- stream financial institutions such as banks.

The agency was formed following the merger of two funding bodies, the Eastern Cape Rural Finance Corporation and Accelerated Growth Initiative for South Africa-Eastern Cape.

“As part of the consolidation of the fragmented work of the previous agencies, the ECRDA continues to provide credit finance, especially to those who are considered unbankable by the conventional banking institutions,” said the agency's acting CEO Dr Lubabalo Mrwebi.

Interest rates

Potential clients who approach the agency will enjoy the lowest interest rates. “Requirements for collateral have been relaxed and preference is now given to livestock as a form of security,” he added.

Women and youth are given special preference.

Since its establishment, the ECRDA has been the vehicle of choice for the Eastern Cape Department of Rural Development and Agrarian Reform in facilitating the implementation of rural development initiatives.

“It manages a budget of R155 million for the current financial year. It is there to implement high-impact priority projects for the department. To this end, in its portfolio it has various divisions that fall under it,” explained Dr Mrwebi.

Divisions of the agency:

• Kangela Development Trust based in Kirkwood. The trust produces citrus and deciduous fruit for processing for local and export markets.
• Agrarian Research and Development Agency. This agency seeks to establish a bio-ethanol plant in Cradock. Its products are sugar beet and sorghum and it has the potential to create direct and indirect jobs.
• Magwa Tea Estate situated in Lusikisiki. The estate produces tea sought after by leading tea processors. The estate employs more than 2 000 permanent employees who are sustaining more than 10 000 people in the immediate vicinity.

The ECRDA has an executive board of directors which is the accounting authority of the agency. The board is appointed by the department and has a staff complement of 144.

The agency coordinates a R38 million crop- ping project on behalf of the department for the current growing season. The major crop is maize with an estimated return of four tons per hectare. It is expected to contribute to food security and the establishment of agro- processing units across the province.