The Agricultural Bank of Namibia has approved loans totalling N$367 million to 646 Namibian farmers in 2013, which shows an increase of 35.4 percent over loans approved in 2012.
The bank noted in its End of the Year report of 2013 entitled “Agribank Performance Report for the year 2013 (January – November 2013)”that the performance of the domestic economy of Namibia is subdued as a result of the continuing recession in the Euro zone which is Namibia’s major trading partner.
“The agricultural sector improved during the reporting period from January-November 2013 as a result of the mass marketing of livestock campaign due to the worst drought in 30 years.” Says Agribank Chief Executive Officer, Mr. Leonard Iipumbu.
He says the inflation dropped below 5% within the target band of 3-6% in October 2013 and the repo and the prime rates remained unchanged at 5.5% and 9.25% respectively, making it affordable to access credit.
The bank with its mandate, has continued to play a significant role towards the national economy in terms of food security, job creation and export earnings in line with Vision 2030.
“I am proud to inform you that despite many constraints such as the drought, bush encroachment and other exogenic factors especially the rising cost of fuel, the bank performed beyond expectations and approved loans totalling N$367 million, an increase of 35.4% over 2012 loan approvals benefiting 646 Namibian citizens.” Says Mr. Iipumbu.
With its intervention, the bank created about 1,938 permanent jobs and 3,876 temporary jobs.
Among the approved loans for 2013, N$173 million which is 47% of the loans approved were for the commercial clients while 26% were for corporate clients, and the National Agricultural Credit Program (NACP), Affirmative Action Loan Scheme (AALS) and Post Settlement Support Fund (PSSF) market segment clients registered 14%, 8% and 5% respectively.
“This investment contributed 21% growth to the overall total loan book.” He says.
The purchase of commercial land by previously disadvantaged Namibians amounted to N$132 million or 36% of the total loans approved, a 12% increase when compared to the year 2012 of N$117.5 million.
A total of 32 previously disadvantaged Namibians benefited of which only 6 farms with a total of 26,668.1419 hectares were acquired under the Affirmative Action Loan Scheme (AALS) at a total cost of N$28,517,700.
A total of N$50.7 million were approved for small-scale farmers under the NACP with 371 beneficiaries, a decrease of 19% over last year. This is attributed to the deficit in rainfall that affected cropping season of 2012/13.
Loans for livestock also decreased by 9% when compared to last year mainly due to the effects of the drought.
However, the loans to resettled farmers under the PSSF recorded an increase of 427% over last year to N$17 million from N$3.4 million benefiting 132 farmers. The surge in the loans for resettled farmers is as a result of the limit that increased from N$65,000 to N$200,000 per loan applicant.
Some of its major key achievements were:
> N$ 97 million loans approved for corporate projects.
> Approval of a five year strategic plan where a balance score card was developed.
> Successful product development for the informal sector market segment.
> The initiation and development of the drought relief measures making available N$91 million to assist hard-hit clients by the drought mitigate its effects on agricultural productivity.
> The reduction of interest rates on average one percentage point to make it affordable to clients
> Comprehensive agro-financing feasibility study was completed and reviewed and the bank will implement some of the recommendations by the next financial year.
Agribank also provide financial resources for the acquisition of commercial agricultural by previously disadvantaged Namibians at affordable interest rates to ensure the sustainability of the land reform program, training and mentoring were identified as critical to constantly transfer skills to emerging farmers, hence the initiation of the Farmers Support Project (FSP).
The project provides training and mentorship to farmers throughout the country in order to enhance their income by improving their knowledge, skills and attitude towards commercial farming. “During the period under review, the Farmers Support Project (FSP) reached 1,446 farmers South of the Cordon Fence (SVCF) and 1,240 small-scale farmers North of the Veterinary Cordon Fence (NVCF) in communal areas. The FSP is indeed making an impact in sustaining agricultural productivity.” Says Agribank CEO.
The bank further calls all clients whose loans were approved in 2013 to take up their loans before March 15, 2014 as failure to do so will result in their loans being cancelled.