Products

The Land Reform Empowerment Facility (LREF) is a Broad-Based Black Economic Empowerment Fund capitalised by the Department of Rural Development and Land Reform and supported by the European Union.

The LREF is a wholesale financing facility through which sefa lends money to commercial banks and other reputable agricultural lenders for on-lending to land reform beneficiaries.

The aim of LREF is therefore to broaden the control, management and ownership by black South African citizens in land-based, high-value, income-generating assets in the agricultural sector.

To increase the commercial success of LREF-funded projects, sefa assists these projects with training and skills development interventions by means of a training grant.

• Mortgage Loan Facility – this is a financing facility which enables the target market to buy and own land for agricultural production purposes, under the following criteria:

  • Maximum loan value of R15-million per project

  • Maximum loan of R1-million per Black person participating in the project

  • Loan repayment period must not exceed 12 years

• Equity Share Scheme – an equity share scheme is a business arrangement in which both land reform beneficiaries and private sector partners buy equity in the form of shares in a land-based agricultural enterprise:

  • Maximum loan of R1-million per person participating in the venture

  • Loan repayment period must not exceed 12 years
    

• Production loans – for the purchase of agricultural inputs such as fertiliser, seeds for land reform projects:

  • To be available for both crop and livestock enterprises

  • To be repayable within 12 to 18 months (depending on length of production cycle)

  • Maximum loan amount of R500 000 per enterprise production cycle

  • Own contribution of 10% (of total funding) may be required
    

• Agricultural asset finance – for the purchase of agricultural machinery and equipment:

  • Lending threshold is R800 000 per farmer

  • Repayment period is within the useful lifespan of the financed asset to a max of 5 years

  • Security is a notarial bond over financed asset