About 46% of South African households are considered poor or low-income, more then 15 million poor people living in rural areas in South Africa and over 60% of black households can be defined as low-income and rely mostly on the informal sector for an income. It is estimated that 60% of South Africa’s people live below, what the United Nations describes, the poverty line.
A recent analysis indicated that more than 80% of South Africa’s adult population has been denied access by the formal banking sector and conventional credit facilities. It is therefore difficult for poor people to get out of the poverty trap.
We as the Northern Cape Provincial Department of Agriculture and Land Reform has a duty and a responsibility to make a meaningful contribution, together with our colleagues in the public sector and in partnership with the private sector and civil society, to help people use the natural resources profitable and in a sustainable way in order to protect the resources for future use by our children.
The Government has developed an appropriate policy and system, the Micro Agricultural Finance Institute of South Africa (MAFISA), that will contribute to assisting the working poor to run existing agricultural businesses, start new agricultural businesses and be able to develop these into fully commercial operations.
MAFISA confirms our commitment to continue our search for better ways of providing financial support to the rural sector in order to benefit the rural poor. the Scheme does not cover all fields of intervention and cannot be mechanically applied. It needs to be adapted to the socio-economic setting of each area and leave room for financial innovations beyond the scope of this Scheme.
Government’s desire to establish MAFISA is driven by the following policy objectives:
- To re-establish an agricultural credit scheme through the department of agriculture targeting the micro and small agricultural and related business; and,
- To provide capital to increase agricultural and other forms of related activities.
Government set up MAFISA to drive and facilitate the development of financial services, which will contribute i.e. to develop very small and micro level farmers, farm workers, farm tenant, small landholder, landless, emerging farmers, processors, micro-entrepreneurs, and the working poor.
The people who could qualify for MAFISA financial assistance must:
- Be active within the agricultural sector, whether it be in the rural or peri-urban areas;
- Be able to embark on self-help initiatives to: (i) improve their livelihoods, (ii) reduce poverty, (iii) develop viable businesses, and (iv) show potential to graduate into larger commercial businesses.
- Be able and willing to repay the money they borrow.
Farmer businesses, which qualify, will be able to borrow up to R100 000, at an affordable rate.
Application forms will be available at the Land Bank and local Provincial Department of Agriculture.
