The Land Bank which provides funding to emerging farmers who can’t access commercial bank loans is in a financial pickle. (iStock)
The Land Bank, which is urgently looking for R3 billion to cover its operating expenses, says it will default on yet another set of interest payments and debt that it is due this month.
The state-owned lender, which provides finance to commercial and emerging farmers, said on Thursday it will not be in a position to proceed with the interest or principal payments due between 18 and 26 June 2020. Since April, the Land Bank has defaulted on a number of bonds.
This time, the bank said there is R119.8 million in interest and R200 million principal due between 22 and 26 June that it cannot pay. The Land Bank will make further announcements about interest and principal payments that fall due after 26 June 2020 at a later stage.
The Land Bank’s liquidity problems have become so severe that it is even reliant on the R3 billion it hopes to raise in the next two weeks to pay out some loans it approved to farmers. It told parliament last month that it is no longer accepting new credit applications.
As a result, farmers in need of new credit have been had to turn to commercial banks or left to fend for themselves if they don’t qualify under the stricter commercial risk assessment practices.
Meanwhile, the bank issued an announcement on Wednesday saying that it expects to finalise its restructuring and embark on a new “repurposing strategy” at the end of September 2020.
