1. Financing developing farmers in RSA Agriculture AgriBusiness | ABSA/Barclays Africa May 2016

2. Key considerations by banks 1.The jockey - ability to do the intended business and handle money (track record) 2.Own equity 3.Security (collateral, insurance, offtake agreements) 4.Ability to repay the loan

3. A view on the Jockey : 7 Habits of success 1.Build industry Networks – Complimentary/ Supportive industries 2.Ensure Client Centricity – Have an in-depth understanding of needs 3.Humble honesty – Know your own SWOT 4.Adaptability – Are you flexible to new demands/shocks 5.Opportunity Orientated - Successful people cultivate positive cultures 6.Always look for improvement - Efficiency is what it is all about 7.Keep a balanced lifestyle – Focus on all aspect of life.

4. Developing agribusinesses in South Africa ChallengesOpportunities No track record:Keep records: Own money How you used grant funding (government or sourced or elsewhere) Use partnerships/joint ventures & offtake agreements Current BEE policy is supportive of this Willing established agribusinesses No records Mostly start- ups

5. Developing agribusinesses in South Africa ChallengeOpportunities No or limited own contribution Government grants (e.g. DAFF AgriBEE Fund for Agroprocessing), loans from DFIs Contribution from other own businesses; e.g. shops, garages – showing income generation (pleading poverty doesn’t help)

6. Developing agribusinesses in South Africa ChallengeOpportunities No securityGuarantee funds: Thembani International Guarantee Fund Khula Guarantee Fund

7. Developing agribusinesses in South Africa ChallengeOpportunities Mostly start-upsOfftake agreements Training & mentorship from farmer organizations & finance institutions Use grants for infrastructure Partner with established farmers

8. ABSA AgriBusiness Support For qualifying clients: Assist with reduced interest loan: - SEFA Land Reform Empowerment Fund Assist to access Thembani International Guarantee Fund Or Khula Guarantee Fund Working with DRDLR for piloting financing model for BEE entities which are jointly owned by emerging & commercial farmers Other support Information (weekly updates on market trends; e.g. in Farmers’ Weekly) Bankers with experience in agriculture Agricultural Specialist in branches Farmer Information days

9. Absa’s Enterprise and Supplier Development Program 9 ACCESS TO MARKETS -www.scnet.co.za -Absa’s Procurement Portal -Links SMEs to corporate or government buyers -R2bn tenders advertised monthly, 4 500 buyers and 31 000 SMEs registered ACCESS TO FINANCE -Provides unsecured lending to SMEs -Against cashflows arising from contract with corporate or government entity -Working capital, expansion finance, commercial assets and property finance ACCESS TO BUSINESS DEVELOPMENT SERVICES -8 Entrepreneurship Centres -Infrastructure: boardrooms -Networking: seminars, workshops -Training: finance, business, compliance

10. Conclusion For developing agribusinesses : Use available resources effectively (grants, own funds, etc.) Prove that you can manage those resources. Use partnerships where you can. Learn (use Farmer Organizations & other support sources). For government and other financing partners Better coordinated funding with a growth pathway Government guarantee funds for first time borrowers of commercial funding.