Land Bank's successful turnaround
State-owned Land Bank is now ready to expand its lending, chief executive Phakamani Hadebe told MPs. Speaking at the company's annual report briefing in Midrand, Hadebe said he believed that within five years, the bank could grow its share of the agricultural funding market from the current 28 to 30 percent market share to at least half of the market.
The bank, now in its third year of a four-year restructuring, was showing all the signs of a successful turnaround, said Hadebe. However, he echoed chairman Ben Ngubane's concerns that the agricultural sector, and especially emerging farmers, are faced ever tighter margins because, while farming production costs rose, farmers see little benefit from the rise in food and product prices.
Hadebe noted that the bank had been successfully providing loan funding at affordable prices. In the past financial year, he said, the cost of loans had dropped from 2.25 percent below prime to 2.5 percent below prime, while steps had been taken to provide emergent farmers in particular with the tools to successfully run their operations. Debt impairment levels had dropped sharply, and the bank had been able to grow its book and improve the quality of the book. "[The bank] has increased its loan disbursements... this is a big achievement." Hadebe said.
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