Home News Agribank loans continue to benefit communal farming areas, says Bank

Agribank loans continue to benefit communal farming areas, says Bank

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Between April 2020 and March 2021, the Agricultural Bank of Namibia (Agribank) disbursed loans totaling N$217 million to a total of 1 301 farmers.

Fillemon Nangonya, Agribank’s public relations officer, stated this in a statement released yesterday.

The bank, which is a state-owned corporation, is charged with promoting agriculture’s growth and development by providing inexpensive and creative 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.

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.

“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%,” he said.

According to Nangonya, the bank’s loans continue to benefit all Namibians in all regions, including communal farming areas.

“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.”

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.

According to the official, 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, he said.

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.