Industry and economy
Hortfin the blended-finance scheme that was created to facilitate and enable transformation in the fruit, table grape and wine industries' value chain, has announced a new partnership with First National Bank (FNB).
Hortfin, comprehensive financing and support system that promotes job creation, transformation, and sustainability was launched in 2018, with the fruit, table grape and wine industries, the Jobs Fund, and the Land Bank as custodians.
The need arose to bring on board an alternative financial partner to ensure sustainable growth within the agri sector. Last year, several discussions were held with commercial banks as well as impact funders, and FNB seized the opportunity to enter the programme as co-financier in December 2021.
The Hortfin/FNB industry agreement event is aimed at celebrating and launching this new partnership. This agreement aims to finance projects that meet the Hortfin entry requirements, in terms of both sustainable and transformed businesses in the deciduous fruit industry (including pome and stone fruit, as well as table and wine grapes) and its value chain, and that could create new jobs.
The collaboration between FNB, Hortfin and the Jobs Fund has resulted in an innovative funding structure that includes commercial funding from FNB and patient funding from Hortfin and the Jobs Fund which also has favourable funding terms for emerging farmers.
The first transactions were submitted to the FNB credit process in January 2022. Since then, R37,2m worth of transactions have been approved, while a further R90m worth of transactions are currently being evaluated through the FNB credit process.
Hortfin CEO Michael Brinkhuis says that this will be an opportunity for both the industry and FNB to increase the impact of this innovative programme. "This agreement is going to give us the ability to grant our target audience greater access to commercial financing in the agriculture sector." For FNB it is important to collaborate with the industry leaders to build the potential of new-generation farmers in the value chain for future growth, said Dawie Maree, FNB Agriculture Head of Marketing and Information. "The Hortfin/FNB joint co-operation unlocks an initial R600m funding opportunity to commercialise emerging (predominantly first generation) farmers in the deciduous fruit and partner industries over the next three years."
Mariette Kotz, Hortgro Group Operations Manager, said that Hortfin was designed to address the need for development finance with innovative solutions. "The partnership with FNB will assist Hortfin to find such innovative solutions to fast-track economic development of the value chain."
Najwah Allie-Edries, Deputy Director General: Employment facilitation at the National Treasury and head of the Jobs Fund, said that the collaboration between FNB and Hortfin holds many opportunities. "The Jobs Fund is inspired by the entry of FNB into the sector it provides a unique opportunity for meaningful collaboration between government, an industry body, and a large commercial funder to provide a much-needed boost to emerging market participants' entry into the deciduous fruit value chain.
"It enables appropriately structured finance solutions to be offered while facilitating crucial technical support to the participants thereby supporting their growth and long-term sustainability. This collaboration materially demonstrates the commitment of all parties involved in contributing to the growth and transformation of the sector. These are the type of partnerships that the Jobs Fund is keen to catalyse across the agriculture sector."
For more information, please contact Michael Brinkhuis: email@example.com