NEWS - NAMIBIA
| 2013-07-26About 100 farms in red
Shinovene Immanuel
THE Agricultural Bank of Namibia’s Affirmative Action Loan Scheme appears severely troubled after it emerged that over 100 beneficiaries are in serious arrears.
This week speculation was rife that Agribank, the institution tasked with administering the scheme, was planning to auction more then 10 farms it financed through the Affirmative Action Loan Scheme.
The Namibian has learned that more than 100 farms are in financial trouble, despite Agribank refusing to give any details pertaining to how much is owed or how many beneficiaries of the scheme are in arrears.
In the 2012 financial report, Agribank Chief Executive Officer Leonard Iipumbu revealed that they were owed N$280 million by those in arrears.
Agribank’s financial performance report of 2012 states that payment demand notes valued at N$644 million were sent to clients. Normal installments made up for half of the demands, as well as N$320 in arrears.
“In return, the bank received N$250 million in payment comprising of N$210 for normal installments due and N$38,9 million were payments from accounts in arrears,” the CEO said the report.
In 2008, the scheme granted 33 loans worth N$28 million while at the same time the total number of clients indebted were 754.
The following year, the bank approved 17 loans worth N$14 million. The total number of clients indebted that year stood at 606.
Concerning the plan of action to recover the money, Iipumbu said the bank would this year “aggressively implement a recovery strategy to recover at least 20% of the arrears”.
The bank said in December that their arrears made up 16%; one percent higher than their target.
“The objective of the recovery is to recover as much as possible of the arrears to bring it down to below 15% target as approved in the bank’s five year strategic plan, which is in line with development financial institutions in the SADC region”.
The scheme is a component of the land reform programme, which enables farmers from previously disadvantaged communities to acquire farms in commercial areas with an option to only start servicing the loan three years after receiving the loan.
It appears that Agribank is cornered in recovering the arrears.
The Namibian is informed that the top leadership at Agribank are reluctant to talk about the debts in the media as some suspect that senior government officials are among those who have farms in the financial red.
Some other sources say Agribank does not want to auction the farms because it will defeat the purpose of the scheme, which was enforced by Cabinet in 1992. A source said black farmers will lose out on the farms if auctioned.
The senior manager of sales, credit and services at Agribank, Shali Shindume, yesterday denied that the bank is planning to auction the farms whose owners cannot meet the agreements they signed.
He, however, confirmed that the bank is engaging relevant stakeholders in order to come up with a plan to recoup the money. Such stakeholders include Cabinet and the Ministry of Agriculture.
Critics say the bank is being soft on those with farms in trouble while it is quick to auction houses of people who failed to honour some of their loans.
The Namibian reported in May that Agribank auctioned off a woman’s home valued between N$780 000 and N$900 000, to recover a debt of less than N$100 000.
Shindume said talks have been ongoing since 2006 on how to deal with those in arrears.
He also said that they are relooking at the scheme in order to determine the best way to find a solution of dealing with debtors.
Government has continued to invest into the affirmative action scheme and last year, the bank financed 32 farms valued at N$120 million. About 10% of the 32 farms fell under the affirmative action scheme.
The bank says the major contributor to the increase in demand for farms can be attributed to favourable interest rates and the relaxed approach by government.
This week speculation was rife that Agribank, the institution tasked with administering the scheme, was planning to auction more then 10 farms it financed through the Affirmative Action Loan Scheme.
The Namibian has learned that more than 100 farms are in financial trouble, despite Agribank refusing to give any details pertaining to how much is owed or how many beneficiaries of the scheme are in arrears.
In the 2012 financial report, Agribank Chief Executive Officer Leonard Iipumbu revealed that they were owed N$280 million by those in arrears.
Agribank’s financial performance report of 2012 states that payment demand notes valued at N$644 million were sent to clients. Normal installments made up for half of the demands, as well as N$320 in arrears.
“In return, the bank received N$250 million in payment comprising of N$210 for normal installments due and N$38,9 million were payments from accounts in arrears,” the CEO said the report.
In 2008, the scheme granted 33 loans worth N$28 million while at the same time the total number of clients indebted were 754.
The following year, the bank approved 17 loans worth N$14 million. The total number of clients indebted that year stood at 606.
Concerning the plan of action to recover the money, Iipumbu said the bank would this year “aggressively implement a recovery strategy to recover at least 20% of the arrears”.
The bank said in December that their arrears made up 16%; one percent higher than their target.
“The objective of the recovery is to recover as much as possible of the arrears to bring it down to below 15% target as approved in the bank’s five year strategic plan, which is in line with development financial institutions in the SADC region”.
The scheme is a component of the land reform programme, which enables farmers from previously disadvantaged communities to acquire farms in commercial areas with an option to only start servicing the loan three years after receiving the loan.
It appears that Agribank is cornered in recovering the arrears.
The Namibian is informed that the top leadership at Agribank are reluctant to talk about the debts in the media as some suspect that senior government officials are among those who have farms in the financial red.
Some other sources say Agribank does not want to auction the farms because it will defeat the purpose of the scheme, which was enforced by Cabinet in 1992. A source said black farmers will lose out on the farms if auctioned.
The senior manager of sales, credit and services at Agribank, Shali Shindume, yesterday denied that the bank is planning to auction the farms whose owners cannot meet the agreements they signed.
He, however, confirmed that the bank is engaging relevant stakeholders in order to come up with a plan to recoup the money. Such stakeholders include Cabinet and the Ministry of Agriculture.
Critics say the bank is being soft on those with farms in trouble while it is quick to auction houses of people who failed to honour some of their loans.
The Namibian reported in May that Agribank auctioned off a woman’s home valued between N$780 000 and N$900 000, to recover a debt of less than N$100 000.
Shindume said talks have been ongoing since 2006 on how to deal with those in arrears.
He also said that they are relooking at the scheme in order to determine the best way to find a solution of dealing with debtors.
Government has continued to invest into the affirmative action scheme and last year, the bank financed 32 farms valued at N$120 million. About 10% of the 32 farms fell under the affirmative action scheme.
The bank says the major contributor to the increase in demand for farms can be attributed to favourable interest rates and the relaxed approach by government.
