SUGARCANE PROJECT 
BEARS FRUIT


Cedric Mboyisa


A sugarcane farming project on the South Coast of KwaZulu-Natal has been a resounding success.


Funded by the Micro Agricultural Financial Institutions of South Africa (MAFISA) through the South African Sugar Association (SASA), the Mthwalume Project – comprising a total of 32 individual growers (17 men and 15 women) – is expected to settle its loan this season. 


The original loan amount was R698 880 to establish 52 hectares of sugarcane. The outstanding amount is only R1 200. “SASA was accredited by the Department of Agriculture Forestry and Fisheries (DAFF) as a MAFISA participating institution in 2010 to provide and administer loans to small-scale sugarcane growers through its Umthombo Agricultural Finance Department,” said Umthombo General Manager, Busani Gumede.


He added: “The Mthwalume Model is based on individual growers taking all decisions on their farms and having individual grower codes, but having a project steering committee that facilitates coordination of operations to encourage economies of scale. This is one of the best performing models in terms of loan recoveries.”


The Mthwalume Project Chairperson, Agnes Shabane, said everything went very well, and that they were still growing sugarcane and suppling it to the local mill. “The funding from MAFISA through Umthombo helped us a lot. We are flourishing because of them,” she added.


The Mthwalume Project had a total of 150 hectares of sugarcane, with the remainder of the growers signing manual cessions with Sezela Cane Payments to pay Illovo Sugar Limited, responsible for establishing their cane. According to Gumede, with regards to loan recovery, Umthombo has over the years been among the best agricultural development financing institutions in South Africa. Umthombo has also been cited by DAFF as one of their best performing MAFISA participating institutions. 


The following are key success factors:

  • Local Loan Monitoring – achieved through partnerships with the local industry stakeholders (millers and growers);
  • Retention Savings Scheme – encourages financial discipline and ensures that funds are set aside for the following year’s crop maintenance;
  • Loan Management Computer System – integrated with other industry systems such as mill cane payment systems and growers’ register. This differentiates it from the conventional banking systems in that it incorporates provision of operational information at each stage of the value chain which enables efficient monitoring and recovery of loans.


Nkhangweleni Ramashia, DAFF’s Chief Director: Development Finance, commented on the Mthwalume Project saying, “It is good news indeed. We need more of these stories.”



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