Land Bank’s Litha Kutta on What Funders Look for in SMEs

At the 2026 SME South Africa Funding Summit, Litha Kutta, Head of Partnership Development and Ecosystem Coordination at the Land and Agricultural Development Bank of South Africa (Land Bank), gave entrepreneurs a look behind the curtain at what happens when a funding application lands in front of a financial institution.

Kutta joined Land Bank in 2023 from a development background rather than banking, which he said led him to ask questions that financial institutions may take for granted. One example is what a funder actually means when it tells an entrepreneur that their business is “highly geared”. His broader message was that entrepreneurs need to understand not only where funding comes from, but what funders are assessing and how to address gaps before submitting an application.

Who Sets the Rules for Funders?

One of the points Kutta wanted entrepreneurs to understand was that the institution assessing their application may itself be accountable to organisations providing it with capital. Land Bank, for example, is funded through different sources, including multilateral institutions.

“When they give you funding, what do they say? You must fund people that’ve got collateral. Fund people that have got experience. Fund people that have got markets,” Kutta said.

Those requirements have consequences further down the funding chain. If the institution raising the capital is expected to lend according to particular conditions, its own credit policy has to reflect them.

“So what’s going to happen to your credit policy? You’re going to adjust it to the requirements,” he explained.

For Land Bank, there is another consideration. As a Schedule 2 entity, Kutta explained that the bank is expected to remain financially sustainable rather than depend on an annual government allocation. That creates a balancing act. Land Bank has a developmental mandate, but it also has to lend money with the expectation that it will be repaid.

“When that is what is on your head, what happens? You start to be prudent in your funding.”

For entrepreneurs, understanding this helps put some funding requirements into context. What appears to be a funder simply refusing to take a risk may also reflect the conditions attached to the capital that institution is using to lend.

Land Bank’s Development Approach

That prudence does not mean development finance operates in the same way as commercial finance. Kutta described a development finance institution as one that is able to fund and take risks in areas where commercial banks may not initially be willing to do so. Land Bank’s approach also extends beyond providing the loan itself.

Kutta’s partnership development team works with different players across the agricultural ecosystem to address some of the barriers preventing farmers from becoming commercially viable. These can range from access to land and compliance to market access and technical support.

He used the example of a farmer in KwaZulu-Natal wanting to supply Boxer. The farmer may have a product to sell but still fail to qualify as a supplier because they do not meet requirements such as the necessary water rights or certification standards.

“My role is to go to Boxer, engage with them and say, ‘Hey, can we partner? You buy from farmers, we fund farmers. Can we collaborate?’”

The process then works backwards from what is preventing the farmer from accessing that market. According to Kutta, his team’s role is to identify those gaps and work with relevant partners to help solve them. The farmer, meanwhile, still has the responsibility to meet the requirements that have been identified.

Once the farmer gets access to the market, the next step is funding. After funding, Land Bank provides post-investment support to help ensure the farmer can deliver on the opportunity.

“Both the market has its own requirements and Land Bank, or funders, have got their own requirements,” Kutta said.

That distinction is important. Getting finance and being commercially ready are related, but they are not the same thing. A business needs to meet the requirements of the market it wants to enter as well as those of the institution it wants to fund it.

What Makes a Business Fundable?

Kutta then turned to what financial institutions consider when assessing a funding application. These can include the entrepreneur’s character, their capability to run the business, collateral, compliance, the quality of their customers and whether the business can realistically repay the funding.

Character, he explained, goes beyond whether an entrepreneur has debt. Funders may look at credit history, payment behaviour, reputation, transparency and whether previous financial commitments have been honoured. That makes disclosure important.

“If you’ve got issues, colleagues, say it up front. Remember, if you don’t say it, I pick it up. It talks to integrity,” Kutta said.

Capability is another consideration, particularly in agriculture, where technical knowledge and experience can directly affect whether a business is able to deliver. But Kutta stressed that the entrepreneur does not necessarily need to possess every skill personally. What matters is whether the business has credible access to the expertise it needs.

An entrepreneur without farming experience, for example, could bring experienced people into the business, partner with someone who has the necessary expertise or establish a mentorship arrangement.

“Demonstrate your experience or demonstrate access to it. Remember colleagues, you don’t have to have it. You can have access to it,” he said.

Kutta applied the same thinking to other weaknesses in a funding application. A business may not have every resource a funder requires, but partnerships can sometimes help address those gaps.

He pointed to Land Bank’s aggregation finance model, which had been tested by bringing together parties with complementary strengths. In one example, a community had land but lacked collateral, while an aggregating company had collateral but needed access to land.

“We mixed two who needed each other,” Kutta said.

The broader point was that entrepreneurs should understand where the weaknesses in their funding applications lie and consider whether those gaps can be addressed through partnerships, additional expertise or other forms of support before approaching a funder.

The Common Thread

Character, capability, collateral, compliance and market access may all matter, but they are not necessarily weighted in exactly the same way by every funder. Kutta illustrated this by comparing how different financial institutions could assess the same application. 

All may require collateral, for example, while one might place greater weight on the entrepreneur’s capability and another on the credibility of the business’s clients. That is why an application rejected by one institution will not necessarily receive the same outcome everywhere else.

“When you go to a funder, understand what matters to them and then tailor your story to fit their credit risk appetite,” Kutta said.

His closing advice to entrepreneurs was to look at the factors funders assess before the application reaches the credit team and use them to interrogate the business themselves.

“Before you submit an application, look at them, consider them, foolproof your business.”

Because while an entrepreneur may be focused on how much capital the business needs, the funder on the other side of the application is asking a different question: does this business, in its current form, represent a risk it is prepared to take?