Agribank urges defaulting farmers to repay loans

Namibia’s agricultural premier lender, Agribank, has advised farmers in arrears on loan repayments of the consequences of non-compliance.

In the financial year 2023/24, Agribank advanced a total of N$370 million to farmers, marking a 26% increase from the previous year.

However, a number of farmers have defaulted on repayments, which unconfirmed reports have estimated at about N$1 billion.

“The bank’s continued ability to fund and support agricultural enterprises is dependent on loan repayments by its clients,” said Agribank’s chief executive, Raphael Karuaihe, in a statement on Friday.

He said Agribank acknowledges and appreciates clients who meet their financial obligations on time, however, clients who default on their payments are advised to be aware of the consequences of non-compliance.

Agribank offers much-needed support to farmers by providing financial solutions to drive agricultural growth and sustainability.

However, defaulting clients risk ITC blacklisting which negatively affects their credit profile and may impact future access to financing, he said.

“Accounts in arrears are being handed over to debt collectors, leading to potential legal proceedings and auctioning of assets pledged as collateral,” said Karuaihe.

He also said clients incur penalty interest on arrears, which raises the total amount owed.

Karuaihe said while Agribank understands that farmers face unpredictable challenges, such as adverse weather conditions and market fluctuations, the farmers must also play their part.

To support clients in financial distress, the bank offers rescheduling payments to align with cash flows, settlement offer options, as well as support and partnership in revitalising struggling agribusinesses to restore profitability and sustainability.

“Farmers experiencing or anticipating financial difficulties must not wait until their accounts fall into arrears. We strongly encourage them to take proactive steps and engage with the bank to explore possible solutions, as the institution is committed to securing a prosperous future for all its clients,” said Karuaihe.

The bank has rolled out an instalment relief and a penalty interest waiver for clients as a form of drought relief.

Instalment relief, effective from 10 July 2024, is for Agribank clients with farmland and livestock loan accounts who are in good standing, and whose instalments fall due from 1 April 2024 to 31 March 2025.

The total commitment for this intervention is N$104.6 million.

The second intervention is a gesture of goodwill, in which Agribank offered to waive penalty interest amounting to approximately N$83 million for this financial year (April 2024 – March 2025) for all clients in arrears.