Only three farms auctioned in 10 years – Agribank

Agribank, the country’s leading provider of agricultural loans, says only three farms belonging to affirmative action loan scheme recipients were sold on auction due to non-payment of loans in the past 10 years.

After the introduction of affirmative action loans in 1992, the government subsidised the purchase of commercial farmland for formerly disadvantaged farmers who qualified.

This was to promote the ownership of Namibian farmland by formerly disadvantaged Namibians, to encourage farmers with large numbers of livestock in the communal areas to move to commercial farmland, thereby freeing up land for smaller communal farmers, and to encourage formerly disadvantaged Namibians to become fully fledged commercial farmers able to enter the export market and contribute to economic growth.

“However, Agribank is on record appealing to its clients facing financial distress and unable to service their loan obligations to individually approach the bank to make arrangements,” said Nangonya.

He said the bank has an accommodative loan collection approach, involving proactiveness in communicating with a client for early problem and risk identification, and flexible repayment options.

“This approach has been working well for both the bank and its clients, hence the repossession of farms is rare with Agribank as it is the last resort,” Nangonya said.

He said those farmers who had ignored the bank’s appeal to make suitable payment arrangements to clear their arrears have, however, had their cases taken to court as a last resort.

“After getting court papers, farmers usually come running to make arrangements with the bank, and repossessions are averted,” he said.

Nangonya said as the affirmative action loan scheme was a specific-purpose vehicle, loans were granted against security of the mortgage bond and are repayable over a period of 25 years.

Nangonya said under other schemes, such as women and youth loans, as well as no-collateral loans, at the end of the 2021/22 financial year, the bank’s total arrears, including the affirmative action loan scheme, stood at 27,8%.

“We appeal to clients to act before it is too late, and not to wait until they are listed or until we have a judgement against them. The best way is to avoid these situations by making repayment arrangements, and making every effort to honour such commitments,” Nangonya advised.

– email: matthew@namibian.com.na