Getting the right finance to support rural Wales

Chief executive of the Development of Wales Giles Thorley says th rural economy is not a niche part of Wales, but is fundamental and foundational

Rural Wales is often discussed in the context of its challenges: a changing population, pressure on incomes, access to services, and connectivity. Those pressures are real and should not be understated.

But I also know that rural communities are home to some of the most resilient, innovative and entrepreneurial businesses anywhere in Wales.

Across the country, rural businesses are already innovating, adapting and investing for the future. What they often lack is access to the right finance that reflects the realities of how they operate.

I spend a great deal of time around farming and rural businesses. My wife runs a smallholding so you could call me the farmer’s husband, so I think about farming a great deal.

I understand what a fantastic asset this part of the economy is, and just how many amazing people work in it. But I believe there is a disconnect around the way farming and the rural economy is perceived. That perception – or gap in perception – is important because it shapes how we think about investment.

The rural economy is not a niche part of Wales. It is fundamental and foundational to the country’s economic future. It supports jobs, local culture, communities, food security, environmental stewardship and, increasingly, our transition to a lower-carbon economy.

Innovation in rural Wales, however, does not always look the same as it does in urban centres. It is often more gradual, more grounded and more closely tied to place. It can be a family farm diversifying into tourism, a food producer expanding into new markets, or a business investing in renewable energy or more sustainable production methods. These are not always labelled as innovation, but they are exactly that.

Across Wales, I have seen many examples of such transition. In Ceredigion, YnNi Teg is a community-owned renewable energy business helping local communities generate more green energy. In Mid Wales, we’ve backed many small rural businesses and entrepreneurs creating jobs in sectors from horticulture to hospitality.

Businesses like Bargoed Farm in Aberaeron are showing how farming and tourism can complement each other, while companies such as Cerrig Granite and Slate demonstrate how traditional industries can invest to reduce carbon emissions and modernise.

All of these businesses showcase the very best of rural Wales and they are not isolated examples. They are innovating, adapting and investing, showing us what a prosperous future looks like.

But what many of them also need is access to long-term capital that reflects the realities of doing business in the rural economy.

Such firms often operate on different timescales to urban businesses. Returns can be seasonal. Investment cycles are longer. Margins can be tighter and access to traditional finance more constrained, particularly for smaller businesses or farms which means that the right product fit is every bit as important as the right supply.

That is why I strongly welcome the forthcoming launch of the Sustainable Agriculture Loan Scheme (SALS). Developed with the Welsh Government and delivered through the Development Bank of Wales, the scheme is designed to support small and medium-sized farms not able to get funding from the private sector to invest in energy efficiency, waste management and productivity improvements.

The structure of the scheme has been developed with the practical realities of the rural economy in mind. Farmers will be able to borrow between £25,000 and £1m; repayment periods will be up to 15 years.

A repayment holiday at the outset can allow businesses time to realise the benefits of investment before repayments begin. Seasonal repayment structures reflect the realities of agricultural cashflow.

Importantly, SALS also represents a wider point about the role public finance can play in rural Wales.

Alongside traditional grant support, repayable finance can become a practical tool for enabling long-term investment while recycling capital for future generations of businesses.

It is about creating lasting impact, not simply offering one-off interventions.

That approach aligns with wider aspirations for Wales. There is growing recognition that economic development must be rooted in communities: supporting Welsh ownership, strengthening local supply chains, retaining wealth here. Rural Wales has a central role to play in that.

There is also a growing recognition that farming itself sits at the centre of several national priorities: food production, biodiversity, energy transition, land management and rural employment.

Supporting sustainable farming practices is not about supporting one sector, it is about supporting communities and landscapes that underpin much of Welsh life.

In doing so, it also aligns closely with the Well-being of Future Generations (Wales) Act, contributing to a more resilient, sustainable and prosperous Wales for the long term.

Of course, finance alone does not solve every issue facing rural Wales. Infrastructure, housing, skills and connectivity all matter. But access to the right kind of finance, money that can be patient, flexible and grounded in local understanding, can act as a catalyst for innovation and investment.

One of the things I admire most about rural businesses is their ability to adapt. Whether in farming, tourism, food production or energy, many of the most forward-thinking businesses I encounter are based in rural communities. They balance tradition with innovation and long-term stewardship with commercial reality.

Rural Wales is not standing still economically; in many areas, it is quietly reinventing itself.