AgMerchant launched as new agriculture sector lender in South Africa

AgMerchant Capital has been launched as the new agriculture sector lender in South Africa. Chris Venter the entity’s founder said it will specifically focus on creating and managing a financial services operation, and supporting all the stakeholders in the South African agricultural value chain.

AgMerchant forms part of a group of companies founded by Sovereign Capital, which has as its passion supporting food certainty on the African continent. Part of the group is an online e-commerce platform for farmers that already offers more than 400 000 products.

The entity was set up with a goal on long-term investment and an understanding of the importance of food certainty in South Africa. Among services to be rendered include foreign exchange, and asset and commodity finance with more set to add as time goes by.

Digital warehouse offering

Further, AgMarket will continue to expand its digital warehouse offering for it to eventually include all products required by farmers to produce food. Both AgMarket and AgMerchant are supported by a technology company, AgXchange, which focuses on digitalisation in the agricultural sector, Venter highlights.

“AgMerchant aims to provide the entire value chain with financial support, backed by innovative, digitised and long-term sustainable financial service solutions. The South African agricultural industry is critical to the continued growth of the economy, as well as to food security and job creation, and is expected to maintain and grow its food export capabilities, contributing to a positive trade balance,” said Chris Venter.

“It is thus essential that the industry should be supported by a robust and focused commercial agricultural lender. Changes in the agricultural finance landscape, some of which were brought about by the Covid-19 pandemic over the past three years, support this viewpoint. In addition, we have seen Land Bank re-assessing its role as a commercial farmer financier. We believe there is room for a financier that understands the cyclicality of the industry and an entity that can finance the flow of the commodity rather than just relying on the strength of the balance sheet of the farmer. Therefore, it is our intention to provide the entire agricultural value chain with financial support to assist the sector in receiving the support it needs to grow and thrive,” he added.