The Agricultural Bank of Namibia (Agribank) has added 1300 farmers to loan book. Fillemon Nangonya, Agribank’s public relations officer issued a statement and said the bank disbursed loans totaling N$217 million, benefiting the farmers.
The bank, a state-owned entity, is mandated to promote growth and development of the agriculture sector through issuing affordable and innovative financing.
“Loans issued out from April to September 2021, will only be reported on at the end of the current financial year although the total disbursement year-to-date August 2021 is estimated at N$70 million,” Nangonya said.
The loans should come in handy for farmers after weather experts last week predicted a good rainy season for most countries in the SADC region, including Namibia. In the past, the bank has had problems with farmers failing to repay their loans, resulting in defaulters having combined arrears of N$500 million. However, Nangonya said the bank had taken measures to rectify the situation.
Agribusiness industry
“Note that the preceding three years of drought which reflected the worst consecutive drought in recorded history in Namibia ending 2019, have affected the agribusiness industry. Although an above average rainfall was recorded for 2020, this relief has allowed farmers to restock to a certain extent, however livestock herds have not yet reached levels required of many farmers to sustainably repay their Agribank loans,” pointed Nangonya.
He said while the current arrears ratio is 24%, the bank’s focus remains on preserving the business in a difficult operating environment, through robustly managing provisions for bad debt to ensure the sustainability of the bank. According to Nangonya, the bank’s loans continue to benefit all Namibians in all regions, including communal farming areas.
“Going forward, the bank made a promise to the shareholder during this year’s annual general meeting, to ensure the reduction in arrears ratio from 24% to 22%. For the 2020/21 financial year, regions with communal farming shared a total of 19% of the loans advanced. Additionally, an amount of N$13 million was exclusively advanced to communal farmers without collateral,” he said
To guarantee loan repayment by beneficiaries, the bank offers no collateral loans mainly to salaried communal farmers, as the loan is repayable monthly via payroll deduction, Nangonya added.
“As for the Emerging Retail Financing Product, farmers are attached to a bank’s approved mentor for the duration of the loan facility. This is in addition to a mandatory training programme in the production, management and marketing of the commodities for which the loan is being requested,” he said.
The bank also came up with a loan scheme catering for women and the youth in October 2020 which offers special treatment for agricultural professionals, flexible grace periods and tolerance for collateral shortfalls. The funds will come from the N$357,4 million that Agribank has made available for all loan disbursements until March 2022. Women and the youth can access the funds through three lending facilities, namely cash flow/contract lending, salary-backed loans and relaxed collateral requirements for farmland.
 has added 1300 farmers to loan book. Fillemon Nangonya, Agribank's public relation){kind=link}