The Eastern Cape Development Corporation says the initial roll-out of its blended finance scheme for small scale farmers is working and that legacy cannabis growers have been among the beneficiaries.

The Agri-Blended Finance Scheme is a combination of a loan and an ‘incentive’ grant, targeting entrepreneurs in under-resourced communities.

The ECDC said in a media release on 1 April 2025 that 30 ‘agri-entrepreneurs’ had received R50,5 million in the past two years and that funding had opened up business opportunities in some of the poorest districts in the country.  The recipients were from the following areas: Amathole, Chris Hani, Sarah Baartman, OR Tambo and Alfred Nzo district municipalities. They also include farmers from the Nelson Mandela Bay Metro and the Buffalo City Metro. 

The main products produced by the funded farmers include beef, dairy, chickens, sorghum, cannabis, yellow and white maize, macadamia nuts, as well as seasonal crops such as spinach and cabbage. 

The ECDCA’s Executive Manager for Enterprise Finance and Business support Zinzile Nkonki (pictured here), said in the release that “the response to the scheme was overwhelming, to the extent that we were not able to fund all farmers that had applied for consideration due to limited resources”.

Nkonki says the Agri Blended Finance Scheme “aims to leverage public and private sector resources to increase the scope of available support (financial, technical, and non-financial), and to unlock and enhance agricultural value chains with a clear commercial intent”.

He says the idea is “to use blended finance instruments such as this one derisk credit and financial risks that tend to render agri-businesses unfundable”. 

The ECDC and the Eastern Cape Rural Development Agency (ECRDA) jointly put up the funding which is aimed at all small-scale agribusinesses, not just cannabis growers, although this is likely to increase in the years ahead.

The ECRDA contributed R33.3 million to fund the incentive portion of the blended finance scheme, while the ECDC ringfenced R25 million for loan funding to qualifying businesses.

Of the R50,5 million disbursed by 31 December 2024, R28,3 million went to the incentive portion, while R22,2 million is loan funding.   

The blended finance scheme mainly funds input costs, production and processing equipment of qualifying applicants as set out in their respective business plans.

These include fertilisers, seeds, irrigation, mechanisation, livestock feed and other agricultural operations activities against which a clear income stream will be derived. It also provides asset based finance for tractors, vehicles, agricultural machinery, and other movable assets required in agricultural operations of the applicant enterprises.

The Landbank is understood to be developing a similar financing model which is likely to be the main financial support mechanism for cannabis farming communities and rural businesses.

#