Land Bank – a specialist agricultural bank for those involved in ensuring SA’s food security

Land and Agricultural Development Bank of South Africa (Land Bank) is SA’s only specialist agricultural bank. Established in 1912, the bank’s sole objective is to serve SA commercial and emerging farmers, and bring specially designed financial services within their reach. These services enable farmers to finance land and equipment, as well as improve assets and obtain production credit.

Land Bank provides financial services that have moved with the times, and it continues to offer services to agri-business and constantly reviews its offerings to ensure they match the needs of industry.

As change has swept across the sector in SA, the socio-economic makeup of agriculture has altered, bringing new entrants from historically disadvantaged backgrounds on to the land. These new farmers face challenges of establishing sustainable agri-businesses across the agricultural value chain. Land Bank has been a commercial lifeline offering appropriately designed financial products that facilitate personal and commercial viability in a sector that is vital to the sustainability of SA and its people.

While established by government mandate, Land Bank receives no financial subsidies from government. Instead, it relies on the expertise of skilled staff that compete on equal terms with commercial banks to obtain the funds it needs from the money market at competitive wholesale interest rates. These funds are then lent to its agricultural clients at market-related rates.

However, as Land Bank enjoys ‘tax-free’ status and also pays no dividends to government, all funds raised are used for development.

The broad mandate, as expressed in the Land Bank Act, covers 11 objectives:

  • Rural development and job creation
  • Equitable ownership of agricultural land, in particular the increase of ownership of agricultural land by historically disadvantaged persons
  • Agrarian reform, land redistribution or development programmes aimed at historically disadvantaged persons
  • Land access for agricultural purposes
  • Agricultural entrepreneurship
  • Removal of the legacy of racial and gender discrimination in agriculture
  • Enhancing productivity, profitability, investment and innovation
  • Growth of the agricultural sector and better use of land
  • Environmental sustainability of land and related natural resources
  • Commercial agriculture
  • Food security.  

Farmers in primary agriculture have specific needs, including acquisition of land, capital improvements to such land, establishment of perennial crops, purchase of livestock and equipment as well as production credit on a seasonal basis.

While the names of the Land Bank products have changed over the past century, the bank has always provided financing to farmers for these purposes.

In addition, the bank provides funding on a wholesale basis to agri-businesses as well as working capital and term loans. Initially, the bank focused mainly on primary agriculture, but over time it became more involved in the agricultural value chain. Today it supports the sector at both primary and secondary levels.

Land Bank is acutely aware of the role it plays as a development finance institution, and as such it proactively develops products and services that are geared at ensuring inclusivity in the agricultural sector – taking into account that special conditions may be necessary to assist some of its client segments to achieve sustainable growth.

  • Recognising that farmers operate under a unique set of economic requirements, Land Bank offers farmers the following:
  • Loan terms that are longer than those offered by competitors. For example, a loan payable over 25 years can be obtained for the purchase of agricultural land
  • Low monthly administration costs
  • Customised product offerings
  • Flexible security options
  • The backing and support of skilled and experienced staff
  • Competitive interest rates and insurance premiums
  • Instalments that are matched to primary income streams. The frequency of instalments can thus be monthly, quarterly, half yearly or yearly. In addition to these unique facilities, Land Bank is committed to supporting sector growth, supply chain development, production expansion and intensification and agricultural innovation.

Some of Land Bank’s principal offerings include:

  • Mortgage loans
  • Special mortgage bonds
  • Establishment loans for perennial crops
  • Short-term seasonal loans.

Land Bank Insurance Company (LBIC) is a wholly-owned subsidiary of Land Bank that offers insurance to farmers and the overall agricultural sector. 

LBIC’s years of short-term insurance experience means it understands the needs of the market and offers products tailored to suit the requirements of clients in the agricultural sector. LBIC’s short-term insurance offerings include asset and crop cover.

Agricultural asset insurance
This covers everything that has to do with farming requirements, including vehicles, fencing, irrigation systems, machinery, livestock and computers. Assets will be insured against fire, flooding, theft and natural disaster amongst other risks. Land Bank insures it all, ensuring that owning assets is safer.

Crop insurance
This cover offers financial security and protection on the client’s investment. The product provides cover in case of crop failure due to excessive rain, hail, frost, wind and physical damage to the whole or part of the insured that could result in a loss
of income.

With more than 60 years of experience in life insurance, Land Bank Life Insurance Company (LBLIC) has tailor-made offerings for farmers. 

LBLIC secures the well-being of the client’s family and offers financial peace of mind. The bank truly understands clients’ life insurance needs, and has made it their objective to meet them.

Land Bank policies provide clients with peace of mind knowing that their family will not struggle without them, and that their legacy will live on. LBLIC can offer long-term insurance policies.

Tel: 0800 005 259 (toll free)
[email protected]