By Wezi Tjaronda WINDHOEK The Agricultural Bank of Namibia (Agribank) has identified affordable funding as one of the six strategies that will enable the bank to improve its performance in 2007. Agribank Chief Executive Officer, Leonard Iipumbu, said this week the bank intends to raise N$995 million over five years at affordable interest rates to enable the bank to finance capital projects in the agricultural industry. In the past two years the bank faced problems of liquidity because of a mismatch between maturity profiles and assets and liabilities and also negative publicity. At the moment though, Iipumbu said, the bank has repaid over N$150 million to its creditors and is again in a position to grant and disburse new loans to applicants. The bank's main challenge in 2007 will be to drive strategies and practically implement projects and activities that will turn around its performance. Apart from affordable funding, the bank has also identified excellent customer service delivery, affordable funding, socio-economic and human resource development, expansion on products and service and enhanced operational efficiency. Between January to date, the bank focused on improving agricultural production per hectare of available arable land in order to maximize on food production. In this regard, 264 applications at N$44.4 million were approved, leaving 260 that were turned down because of insufficient collateral and incomplete applications. The biggest chunk of the N$44 million went to 130 farmers of livestock, followed by 11 affirmative action loan scheme farmers that received loans amounting to N$15.4 million for the purchase of farmland, which accounted for 35 percent of the proportion of the total loan amount respectively. The bank paid out N$3 million to 11 beneficiaries for improvements on farms, N$2.5 million to 15 farmers for tractors and farm implements, N$1.5 million for the purchase of a commercial farm and N$1.1 million for labourers' housing to six farmers. Iipumbu said the bank went into an agreement with the Ministry of Agriculture, Water and Forestry where the ministry paid the bank N$2.7 million to fund lending operations to small farmers at Etunda. This amount has been included in the N$4.9 million meant for production loans. Although Agribank's existing portfolio includes funding activities relating to fish farming, harvesting and processing natural vegetation, forestry, guest farms, insect control, primary processing of plant and animal products, and the use and maintenance of installations of machinery and implements for agricultural purposes, among others, the bank wants to diversify the product range to meet the growing demand for credit especially in rural areas. To develop affordable products and services in rural areas, especially for low-income first time rural farmers, the bank, according to Iipumbu, needs to strengthen its institutional capacity. Among the things that the bank has done is to enter into a lease agreement for the revival of the abattoir at Witvlei.
2006-12-21 00:00:00 11 years ago