Agricultural Loan Repayments Good

WINDHOEK - Agribank says the repayment of loans is “quite satisfactory” amid the current economic conditions. Agribank’s total loan book grew 92 percent over the previous financial year to N$1,36 billion.

As of June this year the loan book stood at N$1,4 billion and Agribank Chief Executive Officer Ambassador Leonard Iipumbu says it would exceed the N$1,4 billion by the end of the year.

The sterling performance is due “to the successful implementation of the restructuring process.

“The repayment rate of loans is quite satisfactory and we will continue to strengthen the recovery process for the bank to accumulate enough liquidity to provide affordable products,” said Iipumbu.

The purchase of farmland is the most predominant loan activity constituting 54 percent of the total loan book, followed by loans for the livestock sector with 14 percent, and consolidation of debts in third place at 13 percent.

Moreover, 10 percent of the total loans are to single women, 23 percent to couples, compared to 64 percent loans held by men. Otjozondjupa Region has the highest proportion of loans granted at 28 percent, followed by Omaheke and Karas with 16 and 14 percent respectively. Oshikoto and Hardap regions are at 10 percent each.

Iipumbu said a sound financial position and an improvement in liquidity has enabled Agribank to not only reduce interest rates but also to review and introduce a loan consolidation facility.

The consolidation facility enables farmers to consolidate several existing and new loans into one affordable facility charged at a weighted average interest rate. Together with reduced interest rates, the facility has provided relief to Agribank clients in a time when economic conditions are not favourable.

‘The outcome of this agreement is quite satisfactory and most farmers responded positively,” said Iipumbu.

The agricultural bank is now looking at concentrating its efforts to put into operation the SAP system to optimise business system efficiency. The bank launched the SAP project in May and it is envisaged that the system would reach full operation by October this year.

“SAP system would provide a business environment which will enable the bank to deliver real time solutions and significantly improve client service delivery,” said Iipumbu.

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