Agribank’s N$187m drought relief war chest 

Agribank’s N$187m drought relief war chest 

Drought-stricken communal and commercial farmers with loans at Agribank have been thrown a lifeline. 

This is after the country’s agricultural premier lender announced that it will offer instalment relief to eligible clients, and waive penalty interest for those in arrears.

The bank’s latest drought relief intervention, which was officially announced yesterday in the capital, is limited to Agribank clients with farmland and livestock loan accounts. 

The instalment relief will particularly target those who are in good standing. 

It will focus on accounts whose instalments fall due from 1 April 2024 to 31 March 2025, and it is expected to benefit about 1 134 farmers out of 2 634 on the bank’s books. 

Agribank’s CEO Raphael Karuaihe yesterday explained that clients who fell into arrears between 1 April 2023 and 31 March 2024 will also be considered, and accounts of qualifying clients will be credited in full as and when instalments fall due. 

Moreover, past-due accounts will be credited with immediate effect. 

“The total commitment for this intervention is N$104.6 million. This roll-out of the drought relief subsidy is part of the interventions that were announced by finance minister Iipumbu Shiimi during his budget speech in February 2024. The drought relief will be implemented effective today [10 July], and it will be in the form of instalment relief and penalty interest waiver for clients,” said Karuaihe. 

The bank will fork out a total of N$83 million to waive penalty interest on the loans of clients that are in arrears. 

Both the instalment relief and waiving of penalty interest are interventions worth a combined N$187 million. 

“We are facing challenging times for both our clients and the bank. We want both to survive, and we are trying to balance many considerations to ensure our clients receive some scope to make it through this difficult period. Our main and sustainable source of funds is loan repayments by our clients. This means that extending the same relief to all clients is unfortunately not a financially viable option at this stage.” 

In May this year, President Nangolo Mbumba declared a state of emergency following the worst drought that Namibia has experienced in 100 years.

Against the backdrop of scarce rains, over 331 000 households have already registered for the government-funded drought relief programme to assist the affected communities, but funding gaps of over N$400 million.

Karuaihe added: “While we acknowledge that the instalment relief may not reach every affected farmer, we trust that our consideration of waiving penalty interest for all clients in arrears serves as a welcome relief to all our valued clients.”