WINDHOEK – The Agricultural Bank of Namibia (Agribank) has approved N$30 million worth of no-collateral loans to salaried communal farmers, its Chief Executive Officer Sakaria Nghikembua revealed on Tuesday.
This follows an announcement by the bank last year that it will offer collateral-free loans to enable working communal farmers with no conventional collateral to access agricultural loans.
The loans target salaried communal farmers who have the ability to repay their loans but do not have property in a proclaimed urban environment. The loans will range between N$5 000 and N$500 000 and is repayable over a period of 12 to 54 months.
Briefing the Minister of Agriculture, Water and Forestry, Alpheus !Naruseb, who was on a familiarisation visit of the bank’s headquarters yesterday, Nghikembua said that in the last year the bank received 333 applications worth about N$44 million.
Nevertheless, he said, the bank only approved 267 applications to the value of N$34 283 million.
According to Nghikembua, of the 333 applications, 84 came from the midland, 21 from Otjeroku, 37 from the south, 100 from Oshakati, 40 from Kavango and 51 from Zambezi.
Nghikembua further told !Naruseb that the bank has managed to recover N$180 million from farmers since February 2017 through its intensified arrears collection strategy and internal legal mechanism.
However, he said, below target and new arrears have emerged from annual instalments due but not fully paid.
Nghikembua said the bank has also taken a decision to support funding of agro-processing industries in its quest to add value to basic agricultural produce, create employment and aid in expanding production in support of economic growth.
As part of the bank’s social-economic transformation strategy, Nghikembua said active stakeholder engagement is being implemented and publicity initiatives are ongoing.
Previously the bank primarily focused on funding primary production – focusing only on the acquisition of farmland, purchase of livestock, construction or upgrading of farming infrastructure and production inputs for crop production and horticulture.
According to the Namibia Statistics Agency, the contribution of primary agriculture production witnessed a decline from 5.3 per cent in 2007 to 3.5 per cent in 2016. Secondary production on the other hand barely contributed more than 1 per cent to the overall Gross Domestic Product.
On his part, !Naruseb thanked Nghikembua for specifically reaching out to farmers in communal areas, saying he is impressed with the way Agribank is giving its support to communal areas.