24 Oct 2013 13:50pm
WINDHOEK, 24 OCT (NAMPA) The NNFU has welcomed the announcement by the Agricultural Bank of Namibia (Agribank) that it will make available N.dollars 90 million to assist farmers during the current drought, but said it is a bit late for some farmers.
The Namibia National Farmers Union (NNFU) Executive Director Oloff Munjanu told Nampa on Thursday that it is, however, still a win-win situation and a national effort.
We welcome this move and accept it with open arms. Although it is a little bit late for the bank in its efforts to mitigate the effects of drought on the affected farmers, we understand that the bank first had to make its calculations before it lends a helping hand to farmers, he said.
The closing date to apply for such drought relief facilities is 31 March 2014.
Agribank Chief Executive Officer Leonard Iipumbu at a media conference here on Wednesday said the bank would provide a production loan facility valued at N.dollars 75 million for a period of six years.
This facility will be offered at a reduced interest rate of four per cent for commercial farmers and two per cent for communal and resettled farmers.
A water and infrastructure facility valued at N.dollars 15 million will enable farmers to upgrade water and other infrastructure to sustain their farms during the drought crisis. This facility will be made available at an interest rate of four per cent for commercial farmers and two per cent for communal as well as resettled farmers, for a loan term of 15 years.
'Ring-fencing' of arrears and suspension of the penalty interest facility will also be made available to farmers who are in arrears as of 31 December 2012. Such clients will be given an amnesty period of five years to apply for this facility and should pay 25 per cent of their total arrears amount upfront.
The balance shall be ring-fenced for five years to be paid in five equal instalments. To ensure client affordability, the penalty interest on arrears will be suspended.
Iipumbu said defaulting on this facility will leave the bank with no option but to take legal action. Clients currently with the legal department of the bank will not quality for such a facility.
Should all clients in arrears take up this facility, the bank is expected to recover about N.dollars 91 million.
Another facility is the instalment holiday period of one year, which targets clients whose instalments became due from January to December 2013.
For instance, a loan period of 10 years for livestock would be extended to 11 years at applicable interest rates.
According to Munjanu, this 25 per cent upfront payment of total arrears is very high, but reminded farmers about the risks involved.
He further appealed to farmers to make use of this opportunity, and advised them not to rush and make quick decisions but to do their homework first.
Make your calculations first before applying for these loans, he added.
Namibia is experiencing the worst drought in 30 years, affecting more than 700 000 people. It is severely threatening the financial sustainability of producers in the agricultural industry.