Closing date looms for Agribank drought relief facilities

Home Business Closing date looms for Agribank drought relief facilities

WINDHOEK – Farmers battling financially to overcome the challenges of the current drought can approach the Agricultural Bank of Namibia (Agribank) for its drought relief financing facilities.

The closing date to apply for these drought relief financing products is March 31, 2014. Among the drought relief financing products at the bank are a production loan facility, as well as water and infrustructure facility. The production loan facility will enable communal, resettled and commercial farmers to cover day-by-day costs on production inputs such as seeds, fertilisers, herbicides, pesticides, fuel and oil costs, including wages, leasing of grazing, licks, and veterinary medicines. This facility will be offered at a reduced rate of 4 percent for commercial farmers, and 2 percent  for communal and resettled farmers over a period of six years. The first year will be capitalised and the remaining balance will be amortised for five years. Clients that were in arrears with repayments on December 31, 2013, must pay 25 percent of their arrears upfront to qualify for this facility.

The water and infrastructure facility is to enable farmers to upgrade water and other infrastructure to sustain their farms through the drought crisis.

The facility is offered to severely affected farmers at an interest rate of 4 perent for commercial farmers and 2 percent for communal and resettled farmers for a loan term of 15 years. A ring fencing of arrears and suspension of penalty interest facility was developed for all clients in arrears as of December 31, 2013. Such clients will be given an amnesty period of five years in which arrears shall be ring fenced. The clients will have to apply for this facility and pay 25 percent of their total arrears amount upfront and 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. Clients who have been handed over to the legal legal department will not qualify for this facility, and the bank will take drastic steps towards clients who default under this facility. The instalment holiday period of one year facility is offered to Agribank clients whose instalments became due from January to December 2013. Such instalments would be deferred to the end of the loan period, thus extending the loan period by one year. For instance, a loan period of ten years for livestock would be extended to 11 years at applicable rates. Clients not in arrears by January 1, 2013 will qualify for this facility while clients in arrears will be required to pay 25 percent upfront of the arrears’ balance to qualify for this facility.

By Staff Reporter