The Development Bank of Namibia has clarified its role and participation in agricultural finance, stressing that finance for direct agricultural investments is a mandate held by Agribank, but that Development Bank can provide finance for agri-enterprise.
This was explained by the institution’s spokesperson, Jerome Mutumba.
Explaining DBN’s definition of direct agriculture, Mutumba said it entails finance for land and agricultural inputs.
However, agri-enterprise, he noted, consists of adding secondary value to agricultural operations, as well as resource transformation of agricultural produce.
“Development Bank will consider finance for agri-enterprise,” said Mutumba.
He went on to split the Bank’s finance for agri-enterprise into three distinct fields.
Firstly, he stated, agri-industry is an enterprise activity that manufactures products to support agriculture, such as fertilisers and feeds.
This category might also include professional services to agriculture, such as veterinary services, welding and fabricating as well as mechanical repairs, he continued, further alluding to the Bank’s skills-based finance for young professionals and artisans.
Secondly, agri-processing consists of transforming and marketing the products of stock farming and horticulture, with finance for items such as mills, feedlots, abattoirs, dairies, processing facilities as well as transport and logistics assets.
Thirdly, Mutumba points to the bank’s climate adaptation facility.
Infrastructure financed under this facility might include solar power, water storage and water distribution for larger agricultural enterprises.
“DBN has a strong track record in the field of agri-enterprise, including finance for abattoirs, feedlots, dairy production and milling plants. The bank sees agri-enterprise as a growth area,” Mutumba quipped.
Elaborating on the bank’s rationale for participation in the field of agri-enterprise, Mutumba said Namibia has prioritised food security since its inception through manufacturing, as well as long-standing support to commodity level processing such as milling.
He added with the supply chain crisis and the current pressure on grain and oil used in food preparation, support for agri-enterprise is more important than ever before.
“Given Namibia’s challenge to substitute grain and cooking oil production, it has become all the more important to find means to stimulate the production of local foodstuffs that can be used as nutritional substitutes for imported agricultural commodities,” said Mutumba. Given the reported waste of approximately 45% of horticultural foodstuff due to a shortage of processing and packaging, he continued, finance for value addition, through manufacturing, and transport and logistics can also enhance food security.
At the same time, he acknowledged the challenges faced by smaller farmers but said the bank advocates that networks of small farmers establish companies in which they are shareholders to spread collateral and owner’s contribution requirements, as well as to ensure consistent and sufficient supply of produce is available.
Mutumba elaborated that with Agribank’s finance for direct agriculture, the Namibia Agronomic Board’s Market Share Promotion mechanism to drive local horticultural supply chains and the Development Bank’s finance for food manufacturing, the country has a strong basis for enh “There is a sound institutional environment that supports agriculture.”
If you are in the field of agri-processing or any form of value addition to agricultural produce and have a viable business plan, approach Development Bank to see how we can support your growth, Mutumba concluded.