Access to adequate financing is often identified as one of the key inhibitors to achieving long-term sustainability for Africa’s agricultural practitioners, particularly small-holder and subsistence-level farmers who typically must resort to borrowing from community members or pooling resources in order to make ends meet.
While 55 percent of Africa’s population is engaged in agricultural livelihoods, only approximately one per cent of bank lending across the continent goes to the agricultural sector according to One Acre Fund, a non-profit enterprise that supplies financing and training to help smallholders grow their way out of hunger and build lasting pathways to prosperity.
“There is a real need to unlock financing for small-holder farmers to give them access to mechanisation and other technologies but there is no use in helping them buy a tractor and then they don’t have money to buy seed and fertiliser,” says Antois van der Westhuizen, Managing Director of John Deere Financial in Johannesburg. “Africa’s farmers require a holistic financing solution that focusses on the entire agricultural value chain.”
Van der Westhuizen says this is partly why the traditional reliance on grant funding from government sources or NGOs has not succeeded in creating real agricultural productivity gains on the continent. It has simply been too limited in scope. Read more