AgriBank to raise N$900m for loans

THE State-owned Agricultural Bank (Agribank) says it wants to obtain a loan of N$900 million to provide loans at favourable interest rates to farmers.

‘AgriBank should be in a position to raise N$900 million possibly locally over the next three years at affordable interest rates for on-lending to farmers at lower interest rates,’ Chief Executive Officer Leonard Ipumbu said yesterday.
‘To maintain low interest rates, AgriBank would first need to reduce its own cost of funding. This could be achieved through strengthening the Bank’s own recovery, raising capital from local financial institutions at affordable interest rates or Government capital injections in the form of equity, interest-free loans and direct State investment for specific schemes such as the Green Scheme, aquaculture or resettled farmers,’ the CEO said in a statement which highlighted AgriBank’s activities of 2008.
The bank lowered its interest rates to farmers towards the end of last year. This was made possible because the Finance Ministry converted its N$100 million loan to AgriBank into equity.
It also introduced a few new products like loans for de-bushing farmland, crop growing and buying weaner calves to raise them until they are slaughter ready.
During 2008, Agri­Bank approved and granted loans worth N$102,8 million to 337 applicants, most of them being previously disadvantaged Namibians who wanted to buy farms under the Affirmative Action Loan Scheme (AALS). This was an increase of 11 per cent compared to 2007.
‘The total loan book of AgriBank increased by 8 per cent to N$1,28 billion during 2008,’ Ipumbu stated.
‘The high price for farmland is affecting the availability of commercial farms to the market for purchase as reflected in the decline in the total loans granted of N$21,8 million for the purchase of farmland in 2008 from N$ 22,5 million in 2007.
‘This problem is of great concern, especially for the previously disadvantaged Namibians acquiring farms under (AALS),’ Ipumbu said.
There were a lot of aspiring previously disadvantaged Namibians who wanted to acquire farmland either through the AALS or resettlement but could not, allegedly ‘due to the scarcity and cost’.