New loan launched to help farmers, support sustainable agriculture

FNB Agriculture launched its new FNB Sustainable Agriculture Loan at Nampo 2024. The aim of the loan is to empower farmers and businesses to adopt practices that ensure growth and contribute to sustainable farming and the health of the planet.

New loan launched to help farmers, support sustainable agriculture
Adopting sustainable farming practices, such as cover crops, is no longer a choice, but a necessity, according to Gert Breet of FNB Commercial.
Photo: Wikimedia Commons
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Speaking at Nampo, Gert Breet, Sustainable Agriculture Lead at FNB Commercial, explained that the loan has been specifically designed to support the crucial role agriculture plays in South Africa’s economy and enable stakeholders to mitigate the impact their practices have on the environment.

READ A guide to the loan application process

“As the world approaches the 2030 deadline for the delivery of the UN’s Sustainable Development Goals, the need for sustainable farming and agribusiness practices has never been more critical. South Africa’s agriculture sector, a cornerstone of the economy and the foundation on which our nation’s food security rests, stands at a crossroads where the adoption of sustainable methods is not just a choice but a necessity, not just for the industry, but for the country,” Breet said.

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Historically, various funding facilities have been available to farmers and agribusinesses, but the achievement of certain sustainability outcomes required from the sector asked for new bespoke finance facilities specifically tailored to drive sustainability objectives within agriculture.

“The FNB Sustainable Agriculture Loan is a ground-breaking financial product for FNB in that it represents the bank’s tangible delivery on its commitment to supporting the transformation of agriculture and enhancing its contribution to a more resilient and low-carbon economy. The loan encourages a variety of sustainable agricultural practices, from renewable energy projects like solar and biogas to water efficiency and regenerative agriculture,” according to Breet.

The loan provides repayment terms of up to 10 years with the option of a 12-month interest-only period.

It also offers 100% financing with loan-to-value ratios of up to 70%, making it suitable to a wide range of agribusiness entities across the agricultural value chain.

According to Breet, FNB deliberately made the eligibility criteria for this loan as all-encompassing as possible to allow a broad range of farmers and agribusiness entities to benefit from its value-adding features.

READ Financial solutions for agricultural business owners

“We streamlined the application process to ensure our clients can quickly access the funds they need to make a real difference in their operations through meaningful investment in sustainable solutions and practices.”
One of the features of the loan is its revolving credit capabilities. “Once 50% of the loan is repaid, borrowers can request the bank to redraw funds for further sustainable initiatives.”
The repayment structure also includes options to extend the 12-month interest-only payments and integrate flexible capital repayment schedules.
“This underscores our understanding that sustainability in agriculture is a long-term commitment that requires adaptable financial support. The FNB Sustainable Agriculture Loan is about more than just money; strategic partnerships and support services are integral to the FNB Sustainable Agriculture Loan,” Breet emphasised.
Breet explained that the new loan also aligns closely with FNB’s Statement of Intent on Agriculture in which the bank recognises that, while adaptation strategies such as regenerative agriculture are crucial for climate resilience, they often remain out of reach for many farmers due to constraints in capital and knowledge.
“By focusing on sustainable finance solutions like this loan, we aim to address these challenges, put climate smart farming practices within reach of a growing number of South African farmers, and facilitate the implementation of best practices across the sector,” he said.
“The FNB Sustainable Agriculture Loan is further evidence of FNB’s long-standing commitment to do much more than provide ‘off-the-shelf’ funding to farmers,” Breet concludes, “but rather invest in a future where farming thrives in harmony with nature, for the benefit of all South Africans.”
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Magda du Toit is a freelance communication consultant and journalist. She has worked in the agriculture sector for more than 35 years. She obtained a BA in Communication (Hons), and also completed a Post-Graduate Diploma in Marketing Management. Throughout her career she has received recognition and various awards for individual and team contributions. She was also the chairperson of the northern branch of Agricultural Writers SA and still serves on both its executive bodies. Magda is also the South African representative at the International Federation of Agricultural Journalists, where she chairs one of the committees.