From a tiny plot to a thriving farm — this is what Aviwe Gxotiwe aspires to achieve for people living in the rural Eastern Cape who are unable to get loans to see their farming dreams come to fruition.
Gxotiwe, a livestock and crop farmer in Somerset East, hopes to launch a financial services business that offers loans while also using traditional stokvels.
“Apart from traditional farming, I also do trading in the old Ciskei and old Transkei,” he said.
“And we need a financial services company in agriculture.
“If people can buy clothes on credit, they should also be able to buy what they need, on credit, in the agriculture sector,” Gxotiwe, who won the top chicory farmer in SA award in 2018, said.
His idea is to turn his clients into subsistence farmers and then small-scale farmers through the use of stokvels, while also offering small loans. A stokvel is a saving scheme where members contribute fixed sums of money to a central fund, normally on a monthly basis.
Each month a different member receives the money in the fund, which was collected during a specific period.
The money from the stokvel would be used to purchase feed, seeds and fertiliser to get people started. “I want to use the idea of stokvels as a saving mechanism for people to launch their own farm,” he said.
“Hopefully, this will grow until they are running a thriving subsistence farm.”
Once his clients were able to produce their own products and livestock, he would step in and purchase it.
“They need a small amount of money to start off and a willing market.
“I would guarantee that I would take the produce.
“There is already gardening knowledge in the villages so people would not have to start off from scratch.”
Through his own business network, Gxotiwe would sell the produce to spaza shops and bigger retailers in the smaller towns. On the aspect of the loans, he said: “People have to wait until the end of the month for their salaries or when grants are paid.
“But while waiting for their money their cattle are dying because they can’t afford livestock feed,” he said.
A bale of lucerne ranges between R120 to R800 with chicken feed costing R200 a bag.
“The amounts will be small as they just need to feed the animals. I can’t help with the water problems but can help with supplying feed on credit.”
Gxotiwe, a former law student, said the banks would never lend the money, largely due to the small amounts being requested.
“They [the people] don’t have anywhere to go unless it is a microlender who would charge 30% on the interest.”
Gxotiwe said he got the idea of offering small loans after watching people being turned away when they tried to buy feed. “Sometimes I would give the feed to people with family relations and tell them to pay later but this bred its own problems as the word spread.
“It will be a turn-key solution starting off with an immediate need that people’s livestock are dying in the villages.
“When they get paid, they can start to service the loan.”
Gxotiwe sub-leases the 2,300ha Soutvleij farm along the Fish River from his father, Harry, who in turn leases it from the government. His father acquired the farm through the department of rural development and land reform’s Proactive Land Acquisition. After a harvest of 36 tons of chicory in 2018, in 2019 he planted lucerne, which is mainly used for animal feed.
The farm has a large pasture for his 1,500 sheep and employs 12 permanent workers. He attended the University of the Free State where he studied law. “But after four years, he realised his true interest was business and the best sector for him was farming.
“Agriculture presents huge opportunities.
“Many people just do traditional farming but the possibilities are endless,” he said.