JOHANNESBURG – AgriSA said that investors in Davos were already concerned by Moody’s downgrading of the Land Bank to junk status.
Executive director Omri van Zyl said that while the impact would be felt in about 6 months, the reality was that institutional lenders would believe the bank was more risky.
He said that the bank’s loan book to farmers was the biggest in the sector at R42 billion and the downgrading would increase the cost of lending and that would eventually be passed on to farmers.
“The Land Bank is supposed to be a developmental type of institution that helps emerging farmers with finance. This is not going to be possible with this new downgrade unless there’s an injection into the bank from the government to soften the financial pressure on the returns.”