Everything You Need To Know To Get Your Agri-Projects Funded

Author: Roux Wildenboer, Absa CIB, Sector Head Agriculture

Co-author: Abrie Rautenbach, Head Agribusiness Retail and Business Banking

If you are looking for funding from our team, here are some things you need to know:

Do your research… and start at A-B-sa

You don’t know what you don’t know.

As a leading pan-African bank, we offer a variety of funding solutions, but it is important you understand the nature of the funding you are seeking and the associated funding criteria.

The better you understand these criteria, the greater chance you will have of being approved by Absa.

Take for example our Structured Trade and Commodity Finance offering which is a market leader in terms of the size and breadth of solutions available. We recognise a significant opportunity to finance the trade flows (import and export) of agricultural commodities regionally and internationally. This solution is typically shorter-term in nature and are secured by underlying assets or commodities.

This would be very different from our funding solutions for Black-owned small and medium to large enterprises operating in South Africa. Qualifying businesses can apply for Agriculture Transformation Finance as we cater for both vanilla and bespoke lending solutions.

No one can succeed on their own

As Africa’s leading pan-African banking group we understand the value of partnerships and the importance of having industry specialists who understand the operating environment that clients work in.

This means that our team of specialists ensure that credit teams are making informed decisions about the operating environment. Our clients can also lean on us for economic insights and to help them identify strategic partnerships.

We also assist clients to understand issues such as climate change, renewable energy solutions or integration with Environmental, Social and Governance (ESG) investing mandates, we have specialists on call to guide them through these matters.

Being prepared is key to success

To operate in the agriculture sector in South Africa takes a very special type of entrepreneur or business owner. Unlike developed markets where you are supported via government grants and subsidies, South African farmers and agro-processors have to be resilient and adjust to challenging operating conditions.

Being the banker of choice means we have to be able to develop innovative funding solutions to meet our clients requirements.  For example, we were one of the first banks to fund grain in silo bags, which allowed for the establishment of alternative storage facilities closer to producers and end users.

We could only do this because we understand the expectations of the client, storer and financier.

If you are considering applying for funding from Absa, you should take into consideration the following:

• Credibility is key. The person applying for the funding needs to have a reputable track record.
• Success needs to be quantifiable. The applicant needs to have processes in place to showcase how success is measured and tracked.
• Adequate risk mitigation structures need to be in place to secure the applicant and the financier against any accidental or natural perils.
• Plans need to be supported by feasibility studies and have all the required licensing and compliance in place.
• The partnership between financier and applicant is based on trust. The applicant needs to show sound management abilities and the financier will reciprocate by availing the funds needed to grow appropriately.

At Absa, we do not pretend to be farmers, because we are not – however, our success in supporting the sector showcases that we can be trusted to help you focus on farming better. We are committed to the agriculture sector and to establishing enduring, trust-based relationships with our clients. With more than 100 years of experience in the agribusiness sector, we have agribusiness specialists to support clients and have all the products needed to be successful in the industry. We are looking forward to being a funding partner of choice for you in 2022.