Land Bank Pauses New Blended Finance Applications as R325 Million Allocation Runs Out

The Land and Agricultural Development Bank of South Africa has temporarily paused new applications under its Blended Finance Scheme after the full R325 million grant allocation for the 2026/2027 financial year was committed. The pause follows strong demand from farmers seeking affordable agricultural finance through the scheme. Land Bank said the decision is intended to prevent new grant-supported commitments from being made beyond the funding available for the current financial year. The development does not mean that Land Bank has stopped lending to farmers or agribusinesses. Farmers who need finance can still approach the bank for its other agricultural lending products, subject to the normal credit assessment and approval process.

The Blended Finance Scheme, commonly known as the BFS, was introduced to improve access to affordable finance for qualifying farmers, particularly historically disadvantaged farmers. Under the arrangement, the Department of Agriculture provides an annual grant to Land Bank while the bank contributes a loan component for qualifying clients. This combination is intended to reduce some of the financing barriers faced by farmers who may struggle to access conventional agricultural finance. The scheme supports investment, business growth and greater participation in the agricultural economy. Since its launch in the 2022/2023 financial year, the programme had supported approximately 540 clients and beneficiaries by the end of the 2025/2026 financial year.

The latest funding position highlights the level of demand for affordable agricultural finance among South African farmers. The demand for grant-supported financing during the current financial year has significantly exceeded the R325 million available through the annual government allocation. Once the allocation was fully committed, Land Bank paused new BFS applications rather than accepting applications that could not be supported by the available grant funding. This approach means that farmers are not being led to expect BFS support when funding for the current year has already been allocated. The pause will remain in place for the remainder of the 2026/2027 financial year under the current funding arrangement.

Importantly, the Blended Finance Scheme has not been discontinued. The programme remains part of the longer-term partnership between the Department of Agriculture and Land Bank, which is structured to run for 10 years. Under the existing arrangement, another R325 million annual grant is expected for the 2027/2028 financial year. Land Bank has said it will communicate when the scheme reopens once sufficient grant funding becomes available. Farmers who are considering BFS funding should therefore keep track of future announcements and ensure that their financial and business documentation is ready when applications resume.

Land Bank is also engaging with the Department of Agriculture, National Treasury and other potential funding partners about ways to increase the amount of affordable agricultural finance available. These discussions include exploring additional or alternative grant and concessional funding that could supplement the existing BFS allocation. Additional funding could help the scheme support more farmers if suitable arrangements are secured. The discussions also reflect the gap between the level of demand from farmers and the amount of grant funding currently available through the scheme. No additional funding has been confirmed through these discussions, so farmers should not assume that the current R325 million allocation will be increased during the 2026/2027 financial year.

For farmers who still need funding, the most important point is that Land Bank remains open for business. The temporary BFS pause applies specifically to new applications under the grant-supported scheme and does not apply to the bank’s broader agricultural lending activities. Land Bank continues to offer 100% loan financing through a range of agricultural finance solutions for qualifying clients. These include mortgage loan facilities for acquiring agricultural land or property, revolving credit for working capital and production needs, instalment finance for machinery and equipment, as well as term loans and structured financing.

This means farmers should not automatically put their investment or production plans on hold because they cannot currently access BFS funding. Farmers who need finance can continue approaching Land Bank to discuss available lending options. Each application will still be considered through the bank’s normal credit assessment and approval processes. The type and amount of finance available will depend on the applicant’s circumstances, financing needs and ability to meet the relevant lending requirements. Farmers should therefore consider which financing option best matches their immediate business needs rather than assuming that the BFS is the only route to Land Bank funding.

The pause also provides an important reminder about the role of affordable finance in agricultural development. Farmers need access to suitable funding for land, production inputs, equipment, infrastructure and business expansion, but the cost and structure of finance can have a major effect on the viability of an agricultural operation. The strong demand for the BFS indicates that there is substantial interest in financing that combines grant support with lending. For emerging farmers and other qualifying producers, access to this type of finance can be particularly important when conventional lending terms make expansion difficult. The challenge now is ensuring that future funding can respond to the level of demand without creating commitments that exceed the resources available.

For farmers who were planning to apply for the Blended Finance Scheme, the immediate priority should be preparation. Keeping financial records, business plans, production information and other required documentation up to date can help reduce delays when applications reopen. Farmers should also review their financing requirements and determine how much capital they need for land, production, machinery, infrastructure or working capital. Where funding is needed before the BFS becomes available again, it may be worth discussing the other Land Bank financing options that remain open. Good preparation can also help farmers make informed decisions about the amount of debt their businesses can reasonably carry.

The R325 million allocation being fully committed is therefore both a funding constraint and a clear indication of demand for affordable agricultural finance. The BFS has already supported hundreds of clients since its introduction and remains an important financing mechanism within the 10-year partnership between government and Land Bank. The current pause means farmers cannot submit new BFS applications for the remainder of the 2026/2027 financial year under the existing allocation. It does not mean that the scheme has been cancelled or that Land Bank has stopped providing agricultural loans. With another annual allocation expected in 2027/2028 and discussions under way around additional funding, farmers can expect further communication as the next funding cycle approaches.