Land purchases half of Agribank's loans

Land purchases half of Agribank's loans ELLANIE SMIT

WINDHOEK



Outstanding loans for land purchases represented nearly 50% of Agribank's loan book by last year.

According to the bank, development finance increased from N$250 million in 1990 to N$3 billion in 2020.

“The bank's loan book for land purchases stood at N$1.5 billion accounting for about 49% of the total land book,” Regan Mwazi, the bank's marketing and customer strategy executive manager, said.

He said the loan book represents the value of loans extended to clients which are still outstanding and excludes loans that have been fully paid up over time.

“Over the past five years, the bank has advanced loans worth over N$1.5 billion to commercial and communal farmers, including some without any collateral for various farming enterprises.”

Mwazi explained that Agribank is a government agency for implementation of land reform initiatives through credit of disadvantaged Namibians to acquire farmland ownership.



Affirmative Action

He said the Affirmative Action Loan Scheme (AALS) is one of the land reform interventions, initiated shortly after independence in 1992.

During the period between 1992 to 2020, Agribank granted loans valued at N$784.3 million to AALS beneficiaries, resulting in 3.41 million hectares being financed under the scheme.

According to Mwazi, commercial banking institutions, on the other hand, represent an alternative source of private capital in the agriculture sector.

He said based on the latest available figures, the total credit extension by the commercial banking institutions stood at N$4.4 billion, while the combined credit extension for commercial banking and Agribank accumulated to an amount of N$7.5 billion as at the end of September 2020.

“By implication, Agribank holds a larger share of the total agriculture credit extension, recorded at 40% at the end of September 2020.”



Advisory services

He said in addition to loan advances, Agribank introduced agriculture advisory services for farmers in 2017 through training and mentorship activities.

Mwazi said the key objective of these interventions is to develop and improve farmers' skills and to improve on-farm productivity on a sustainable basis.

He said a total 25 852 farmers, of which 40% are women, have been trained by Agribank's Agriculture Advisory Services Division's capacity development interventions, focusing on the transfer of know-how, knowledge, skills and competencies using different methods such as face-to-face training courses, published articles, radio broadcasts, mobile phone and social media learning.

Moreover, 84% of short-training courses conducted have focused on building capacities in diversified farm enterprises to enhance farmers' resilience to climatic shocks and sustain farm production.

The total investment in Agribank training and mentorship interventions has amounted to N$25.4 million between April 2017 and March 2021, Mwazi said.