SOME PERSPECTIVES OF RURAL LENDING FOR THE RURAL PERIPHERY OF SOUTH AFRICA IN ORDER TO PROMOTE RURAL DEVELOPMENT AND SUSTAINABILITY: A FOCUS ON THE SERVICE AREA APPROACH

Abstract

This paper examines the possibilities of strengthening agricultural credit, which must culminate in the service area approach evolved by banks and cooperatives in some developing countries and, attempts to stress that effective monitoring of the system will help improve rural lending. In selecting and using this approach amidst other reasons, as one of the strategies in the new North West Province of the Republic of South Africa, the writer posits the current vehicle of rural lending in the form of the present Agricultural Bank, formed under the erstwhile Bophuthatswana state during the apartheid era of government must be wholly supported against the background that, it has service capabilities in place and that post 1994 the democratic South African government has followed the use of the Bank without any serious changes in respect of delivery. It has to however, be restructured in order to become a development bank, less reliant on government subsidies and commercially oriented in order to become a strongly viable, independent and self – sustaining rural lending institution. Its role as a conduit to administer funding via other lending institutions, the Noordwes (North West) Koperasie (Cooperative) and other cooperatives including possible linkages with commercial banks cannot and must not be under estimated, if the needs of the rural periphery of the North West Province are to be meaningfully addressed. The paper is not all encompassing but expands the conversation in this regard