Farmers Turn to Commercial Banks as South African Lender Stalls

South African farmers are increasingly turning to commercial lenders to top up their working capital as the Land and Agricultural Development Bank battles a liquidity crisis, Bloomberg News reported. The Land Bank, which supplies about 30% of loans in the agricultural industry, missed a loan repayment in April that triggered a cross-default provision in some of its bonds. As the state-owned lender works with its funders and National Treasury to restore its financial affairs, farmers are looking elsewhere. “Some Land Bank clients are adopting a proactive approach in exploring new financial partners as they do not want to wait until the last moment,” said John Hudson, the head of agriculture at Johannesburg-based Nedbank Group’s business-banking unit. “Some are starting to test the water, whereas others are certainly being far more direct and saying ‘we want to move.’” Read more