Review of small farmer finance and livelihoods in South Africa

Introduction : This overview serves as a section of the background work for the Small Farmer Finance project. The project is based on the reality of the rural areas of South Africa. It recognizes that rural people mobilise income from a range of sources. In many instances farming plays an important role, but in terms of monetary contribution to the household income, not as important a role. It seeks to find adequate background material on which to base the next stage of the study. In this background document we start with an overview of the microfinance market in South Africa. This provides an overview of the complete microfinance sector, including the finance of small farmers. Note that we concentrate on loans below R10000. However, we will also address larger loans (from R10000 to R100000) in a sub-section on small farmer finance. This overview is followed by a discussion and illustration of livelihood strategies in the rural areas of South Africa. This is then combined in a section on finance and livelihoods. Due to the importance of the impact of HIV/AIDS in South Africa we also include a relevant section followed by some concluding remarks.