THE Agricultural Bank of Namibia’s loans dished out in 2017 grew by 7,4%, standing at N$2,6 billion, compared to the N$2,4 billion recorded in 2016.
This was outlined in the bank’s 2017 annual report tabled in parliament last week, which showed that interest income grew by 6%, standing at N$167,5 million in 2017, compared to the N$157,4 million recorded in 2016.
Moreover, interest income on investments grew by roughly 18%, standing at roughly N$19 million in 2017, compared to the N$16 million seen in 2016.
Other operating income, however, reduced from N$14,4 million, translating to 13%, in 2016, compared to the roughly N$13 million seen in 2017. The report attributed the decrease to higher income from loan application fees recorded in 2016, as opposed to 2017.
Moreover, the report added that administrative expenses increased to N$121 million in 2017, compared to the N$109 million recorded in 2016, which was attributed to an increase in staff costs of approximately 13%, provision for actuarial valuation on post-retirement medical benefit obligations recorded at N$4 million, new subscription fees for the use of a rangeland monitoring tool at N$1 million, and increased depreciation due to the acquisition of new assets at N$4 million.
Loans to new clients in 2017 stood at N$304 million, of which the biggest chunk of N$103 million went for farmland purchases, while livestock loans stood at N$44 million, and productive infrastructure improvements stood at N$29 million.
During the period, the report showed that N$7 million was set aside for resettling farmers, while the bank proposed changes to the land reform ministry in order to make the post-settlement support fund more meaningful for resettled farmers.
In his review, Agribank chief executive Sakaria Nghikembua noted that the bank adopted the Bid-2 system, recommended for banks operating under the Banking Institutions Act of 1998, “for the purpose of computing the provision for bad debts. This method resulted in a decrease in bad debt provisions for the year.”
He said some actions taken by Agribank included the implementation of a bank-wide performance management system, whereby the first performance appraisals for the financial year 2016/17 were conducted in May 2017.
Nghikembua added that in April 2017, the bank developed the no-collateral loan product for salaried communal farmers.
“The bank implemented the repositioning of the farmers’ support project and its integration into the bank effective 1 April 2017, while training and mentoring interventions are currently underway throughout the country,” he said.
