Agribank loan book worth N$2.4 billion

> Timo Shihepo

Windhoek – The Agricultural Bank of Namibia (Agribank) loan book has rose from a minimal N$650 million in 2005 to an impressive N$2.4 billion in 2015, the bank’s Chief Executive Officer Leonard Iipumbu has revealed.

Iipumbu said during the period between 2005 and 2008 the bank was in financial stress and was tasked to spearhead the development and implementation of its five year strategic business plan.

“To reposition the bank to financial sustainability, we decided to implement strategic initiatives such as the restructuring process, integrated core banking system as well as the recovery strategy which is aimed at containing the arrears position compromising the long term sustainability and on-lending capacity of the bank and strengthening the balance sheet,” he said.

As a result, the bank’s loan book grew by an average 24 percent per year from N$650 million in 2005 to N$2.4 billion in 2015.

The former Namibian ambassador to France and the United States of America was speaking at the official inauguration of the renovated Agribank Head Office Building on December 9, in Windhoek.

The office was renovated at a total cost of N$59 million. Agribank management, the board and shareholder – the Ministry of Finance – decided to embark on a massive renovation in order to create a conducive business working environment “to our staff in order to provide timely service to the bank clients”.

“The building has been designed in such a way to adopt modern energy efficient devices, while conserving natural light. Today, we are proud and can provide effective and efficient service to all our stakeholders.

“Moreover, the Bank adopted the latest technology such as finger print devices to improve safety and security. As we take you through the tour of the building, you will be able to witness the state of the art technology deployed,” he said.

He added that the current strategic plan ends in March 2015 and the next five year strategic business plan, which is yet to be developed, will focus more on new products and the development of the Agro Processing Industry to support the government’s “Growth at Home” strategy and Vision 2030.

“Agribank, as a development finance institution will continue to implement its mandate, thus providing affordable financial solutions to our clients for the development of agriculture and related activities.

“We remain dedicated to the mission and vision of the Bank. The Bank recently launched the Emerging Financing Retail Product that requires minimum collateral, which to date 1 619 applications were received amounting to 530 shortlisted to the value of N$230 million,” said Iipumbu.

President Hage Geingob who officially inaugurated the building said Agribank should continue to play a significant role in the equitable distribution of land through land purchases by previously disadvantaged Namibians under the National Resettlement Programme.

He said in keeping with the concept of “No Namibian should feel left out”, he was pleased to note that Agribank is committed to ensuring that all Namibians are able to access affordable funding in to effectively participate in the agriculture sector.

He said he is aware that the bank is busy piloting a number of products that require minimum collateral in order to ensure wider Namibian participation in this sector.

“To date, 1007 previously disadvantaged Namibians acquired 5.9 million hectares of land and thus created or maintained 6000 jobs.

I am informed that a notable achievement in this regard is that Agribank has contributed about 40 percent of the National Target of 15 million hectares of farmland ownership of the previously disadvantaged persons,” he said.

To date the Agricultural Bank of Namibia has financed over 8,000 small-scale farmers both in rural and communal areas under the National Agricultural Credit Programme (NACP) facility worth N$450 million, or 19 percent of the loan book, according to Agribank Chairperson Terttu Uuyuni.

“We recognize that much more needs to be done to improve self-sustainability of farmers and food security in the regions. We are conscious of the fact that the majority of our potential clients are mostly communal farmers and cannot access finance due to lack of security. “In this regard, concerted efforts are underway to implement the Emerging Retail Financing Product– a collateral free credit facility – that is a customized product that will suit the socio-economic conditions of this segment of our society,” she said.

December 2015
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