Despite the Land and Agricultural Development Act of 2002, the Land Bank still behaves more like a commercial bank than a DFISA has various development finance institutions mandated to contribute to economic development. The Industrial Development Corporation , the Development Bank of Southern Africa, the Land Bank, the National Empowerment Fund, and the Small Enterprise Finance Agency were geared to promote economic inclusion but have failed to produce a sizeable number of black entrepreneurs.
Monetary policy reforms that oriented financial services to the market led to the reduction of interest-rate subsidies from the Land Bank. The strategy of the SA Reserve Bank to defend price stability resulted in a rise in interest rates. The Land Bank became tied to the interests of legacy farmers, who had now consolidated into large, commercial farming groups. The Land Bank’s lending practices contributed to structural inequalities between smaller black farmers and larger commercial farmers.
Anecdotal evidence from black entrepreneurs suggests the IDC behaves like commercial banks with similar interests to them, making it difficult for the IDC to fulfil its mandate to empower black entrants into the economy The IDC was also tasked in the amended act to support the BEE agenda. It provides development finance, project development, non-financial forms of business support, capacity building, research and policy inputs.