02 Sep 2015 07:30am
WINDHOEK, 02 SEP (NAMPA) - The Agricultural Bank of Namibia (Agribank) has developed four new drought relief facilities for farmers which they can apply for before February next year.
The current drought situation is taking its toll on the agriculture sector, with potential devastating effects on food security and the livelihood of farmers in certain areas.
Agribank has invited farmers to apply for these facilities as it is of importance to the sector in order to mitigate the effects of the drought, according to a media statement issued on Tuesday and published in local media.
Farmers are advised to contact their nearest regional branch for the application. The closing date to apply is 28 February 2016, the statement said.
The first facility on offer is an interest holiday of one year, which gives the banks clients whose instalments became due between 01 January and 31 December 2015 a repayment break. The capital portion of the instalment due during the respective period will be capitalised, meaning the interest portion will be waived and applied in the additional year added to the loan period, according to the terms and conditions.
The second facility allows clients to ring-fence their arrears, while penalty interest will also be suspended. This gives clients amnesty to repay their arrears, essentially restructuring their debts. Ring-fenced arrears are payable over five equal instalments with a zero per cent interest rate.
The third benefit is in the form of production loan facilities, which covers the production loan, as well as the lease of grazing and transport. Both facilities have a six-year term, of which the first year will be capitalised and the remaining balance will be amortised (paid off with regular payments) over the remaining five years.
The production loan facility enables farmers to cover the day-to-day expenses of production input costs such as seeds, fertiliser, herbicides, pesticides, vaccines, fuel, oil costs, wages and licks. Under the lease of grazing and transport, the bank provides an interest rate of four per cent per annum for commercial farmers and two per cent per annum for communal and resettled farmers. One of the conditions is that proof of a transport contract with a registered livestock carrier must be provided.
The fourth facility is the water and infrastructure improvement facility, which includes the drilling of boreholes; solar systems for water; and fencing. The term includes a 15-year period, of which the first year will be capitalised and the remaining balance will be amortised over the remaining 14 years.
Resettled farmers who have not fully utilised the facility under the post-settlement support scheme should apply for the production loans and water and infrastructure loans under the post-settlement support scheme.
Those who have fully utilised the facility under the scheme may apply under the drought relief scheme. However, the normal Agribank collateral requirements apply, it added.