WINDHOEK – Agribank has made a budget provision of N$90 million for drought relief measures. “The current drought in the country has prompted Agribank to review its recovery strategy and the budget for the 2013/2014 financial year,” said Agribank’ Chief Executive Officer, Ambassador Leonard Iipumbu in a press statement issued this week. The bank says it has noted that farmers are faced with a great number of problems such as low prices per head, high input costs, increased mortality rate and crop failure. Hence a N$75 million budget has been availed for the production loans facility option.
“The purpose of this facility is to enable both communal, resettled and commercial farmers to cover day to day costs on production inputs such as seeds, fertilizers, herbicides and pesticides,” he said. The option would be offered at a reduced four percent rate for commercial farmers, and two percent for communal and resettled farmers.
“This facility will be for a period of six years. The first year will be capitalised and the remaining balance will be amortized for five years. Clients must have a good repayment record with the bank to qualify for this facility,” Iipumbu said.
The bank has overall introduced four relief measures to assist the farming community in mitigating the current impact of the drought.
A water and infrastructure facility will enable farmers to upgrade water and other infrastructure to sustain their farms through the drought period. A N$15 million budget is availed for severely affected farmers at a four percent interest rate for commercial farmers and two percent for communal and resettled farmers for a loan term of 15 years.
“The normal application process and collateral will be required,” Iipumbu said. The ring fencing of arrears and suspension of the penalty interest facility is for all clients in arrears as of 31 December, 2012. Such clients will be given an amnesty period of five years in which the arrears shall be ring fenced,” he explained.
Clients will have to apply and pay 25 percent of their total arrears amount upfront and the balance shall be ring fenced for five years to be paid in instalments. “To ensure client affordability, the penalty interest on arrears will be suspended,” he added.
The instalment holiday period of one year option is offered to Agribank clients whose instalments become due from January to December 2013. Such instalments, Iipumbu explains, would be deferred to the end of the loan period, thus extending the loan period by one year.
“A loan period of ten years for livestock would be extended to eleven years at applicable rates. Clients not in arrears by 1 January 2013 will qualify for the facility while clients in arrears will be required to pay 25 percent upfront of the arrears’ balance to qualify for this facility,” he said.
By Staff Reporter