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Blended Finance Scheme Grant + Loan to Commercialise Black Producers

The Blended Finance Scheme (BFS) is a landmark programme combining government grants with institutional loans to make agricultural finance affordable for black producers. Launched by DALRRD in partnership with the Land Bank, IDC, and ABSA, the BFS uses conditional grants as equity contributions on behalf of black farmers to lower gearing and reduce financial risk. The grant component is blended with a loan from a participating financial institution -- the farmer never receives the grant in isolation.

The scheme targets commercially viable black-owned farming enterprises in commodities prioritised by the Agriculture and Agro-processing Master Plan (AAMP). It is a 10-year programme with the government investing a minimum of R3.2 billion. Applications are made directly through participating financial institutions. In September 2025, DALRRD held roadshows across provinces (including a Paarl event attracting over 250 farmers) to promote the scheme to emerging producers.

10-Year Programme
R3.2 Billion
Government commitment to blended agricultural finance. R325 million in grants per annum, matched by institutional loans, creating R650 million in annual funding capacity.
0
Black producers supported
0
Jobs created
R1.58Bn
Approved (grants + loans)
R50M
Max grant per transaction

Participating Institutions

DALRRD has signed MOAs with three financial institutions. Engagements with FNB and Nedbank are underway.

Land Bank
Fund Administrator + Lender
MOA: October 2022
Specialist agricultural DFI. Dual role as fund administrator (manages grant allocations to all institutions) and participating lender. 205 applications approved by July 2024.
Industrial Development Corporation
Development Finance Partner
MOA: March 2021 (trailblazer)
First institution to partner on the improved BFS. R21.45 billion approved for emerging and small-scale black farmers. Provides comprehensive lifecycle support.
ABSA
Commercial Bank Partner
MOA: May 2024
First major commercial bank to join the BFS. Uses the same DALRRD concept document and qualifying criteria. May apply additional bank-specific lending standards.

Grant-to-Loan Ratio

Select Your Farmer Type

The grant-to-loan ratio depends on your scale of operation. Smallholders receive the highest grant proportion.

🌱 Smallholder
🚜 Medium-Scale
🏭 Large-Scale Commercial
60% Grant
40% Loan
DALRRD Conditional Grant (equity)
Institutional Loan (market rates)
Smallholder farmers receive up to 60% of the blended amount as a non-repayable grant.
Maximum grant per transaction: R50 million

Economic Benefits Scorecard

Applicants must score a minimum of 20 out of 50 points on DALRRD's Economic Benefits Criteria scorecard.

Criteria (50 Points Total)

Each criterion is weighted. You need at least 20 points to qualify for the grant component.

Ownership & Transformation
At least 60% black-owned and managed enterprise
/50
Inclusivity
10% farm worker profit sharing, community benefit
/50
Own Contribution
Financial or non-financial contribution by applicant
/50
Employment Creation
New permanent and seasonal jobs generated
/50
Contribution to Food Security
Impact on household and national food production
/50
Sustainable Development
Environmental sustainability and climate resilience
/50
Localisation & Markets
Local value addition, market access, and exports
/50
Min. 20/50

Eligible Commodities (AAMP)

🍎Fruits & Nuts
🥦Vegetables
🌾Grains
🍬Sugarcane
🐔Poultry
🐄Beef & Sheep
🐖Pork
🫘Industrial Crops
🐟Aquaculture
🌲Forestry

What BFS Funding Can Be Used For

Land Acquisition
Purchase of agricultural land and commercially viable agri-business entities.
Expansion & Start-Ups
Production expansion on existing farms. Brownfield and greenfield start-ups.
Capital Equipment & Infrastructure
Machinery, pack houses, storage, irrigation, fencing (CAPEX).
Working Capital & Production
Operating costs, inputs, and seasonal production requirements.
Insurance Subsidy
Crop and livestock insurance cover (capped at 6% of grant).

Agro Energy Fund (R1.21 Billion)

DALRRD and Land Bank launched a separate Agro Energy Fund (R500M grant + R710M loan) for alternative energy solutions on farms. Targets irrigation, intensive production, and cold chain. Open to all South African farmers including smallholder, medium, and large-scale commercial. Apply via Land Bank.

Who Cannot Apply

  • Politicians in public office (12-month cooling period)
  • Government and SOE employees (24-month cooling period)
  • Foreign nationals, dual citizens, illegal immigrants
  • Part-time producers (even with a farm manager)
  • Distressed producers using grants to settle existing debt
  • JVs where farm workers are not involved in management
  • JVs where black producers hold less than 60% ownership
  • Producers who mismanaged previous government support
  • No provision for farm worker profit-sharing
  • Employees of BFS administering organisations
  • Politically exposed persons posing reputational risk
  • Special advisors for agricultural programmes (all levels)

Lease Agreements Accepted as Security

The Banking Association of SA agreed in writing to accept long-term lease agreements (including PTO) as security, provided the lease is longer than the funding period. Land reform beneficiaries and communal land farmers can access BFS funding without a title deed -- a key breakthrough for agricultural transformation.

Common Questions

No. The conditional grant cannot be approved on a standalone basis. Grant funding must always be in conjunction with loan funding from a participating financial institution. The grant acts as equity to reduce your borrowing costs.
Apply directly through a participating financial institution (Land Bank, IDC, or ABSA). Register on the Land Bank e-Services portal at landbank.co.za. Your application is assessed against the DALRRD scorecard (min 20/50 points) and the institution's lending criteria. DALRRD performs oversight but does not receive applications directly.
Loans are priced at market-related rates. However, because the grant reduces your total borrowing (acting as equity), your effective cost of finance is significantly lower than a conventional agricultural loan. The grant portion is non-repayable.
No. Long-term lease agreements, including PTO, longer than the funding period are accepted as adequate security. This was a key agreement specifically to enable land reform beneficiaries and communal land farmers to access BFS funding.
The BFS targets: 50% women, 40% youth, 6% people with disabilities, and military veterans. Your enterprise must be at least 60% black-owned and managed. For joint ventures, the non-black partner must hold between 26% and 40%. All enterprises must provide 10% farm worker profit sharing.
A separate R1.21 billion fund (R500M grant + R710M loan) launched by DALRRD and Land Bank for alternative energy on farms. Unlike the main BFS, the Agro Energy Fund is open to all South African farmers regardless of race, targeting energy-intensive agriculture including irrigation, intensive production, and cold chain operations.

Apply & Resources

Application portals, brochures, and programme resources.

Land Bank BFS Portal

Register, enquire, and apply

BFS Brochure (PDF)

Official Land Bank brochure

DALRRD Official Website

Department of Agriculture

IDC Agro-Industry

Development finance partner

BFS Launch Announcement

SAnews.gov.za

Agro Energy Fund Launch

R1.21 billion energy fund

grantZA is an independent informational guide and is not affiliated with DALRRD, Land Bank, IDC, or ABSA. Apply directly through a participating financial institution at landbank.co.za.