Agribank soon to rollout no-collateral loans
By Magreth Nunuhe
WINDHOEK – The Agricultural Bank of Namibia (Agribank) has invested over R28 million in a five-year strategic plan to support farmers through training and mentorship in order to better manage their farming operations, increase productivity and contribute meaningfully to agricultural output in Namibia.
One of the key initiatives under the plan is to establish a Farmers’ Advisory Services Division within Agribank with an annual budget provision of R6.4 million adjusted yearly by seven percent for inflation.
The plan, which is also aligned to the Harambee Prosperity Plan (HHP), the country’s development programme from 2016 to 2020, is expected to be operational as of 1 April 2017.
Rino Muranda, Agribank manager marketing and communication, revealed this, adding that to date, about 3,500 farmers have benefitted through the mentorship programme, 78 through the pre-settlement training, while 1,336 have profited under the post settlement training.
Apart from the strategic plan, Agribank intends to soon roll-out a no-collateral product specifically aimed at communal farmers without traditional forms of mortgage collateral, who earn a monthly salary.
“The bank is now in the process to finalise the details of the product, which we hope to launch and roll out by 31 March 2017,” he said.
The expansion of the loan scheme is indicative of communal farmers appetite for loans despite the restrictive nature as a result of the lack of collateral.
Loans will be granted to acquire new equipment and implements such as irrigation equipment, boreholes, windmills, dams, water pumps, combine harvesters, generators, ploughing equipment, fencing, hammer mills, mahangu threshers, silos, processing and oil extraction equipment, among others.
The loans are repayable over periods ranging between five and 10 years and legally acceptable conventional collateral will also be accepted as security.
To qualify, applicants must provide latest six months’ bank statement, latest pay slip for part-time farmer or proof of income, latest municipal bill if residential property is offered as security, have a clean credit record, either be full- or part-time farmers and be Namibian citizens, and provide a business plan.
Agribank offers flexible installment options whether monthly, quarterly, biannual or annual.
Loans are granted against security of fixed property, investment or any other acceptable form of security, such as fixed deposits, investments and surrendering value of policies.
Agribank has so far disbursed 646 loans worth over R768 million through the Affirmative Action Loan Scheme, with the farms purchased through this scheme covering an area of 3.3 million hectares. In addition, 8,877 loans were disbursed to small scale farmers amounting to roughly R506 million.
According to Muranda, Agribank supports Namibia’s economic and social transformation in the agriculture sector, through a partnership with Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) to fund the Farmers Support Project (FSP), under which emerging farmers are up-skilled in farm management to the tune of R6 million per year.
“The current financial agreement between Agribank and GIZ will end by 31 March 2017,” he said.