Commercial banks need to do more for farmers 

Home Agriculture Commercial banks need to do more for farmers 
Commercial banks need to do more for farmers 

The agricultural sector’s overall contribution to Namibia’s gross domestic product (GDP) stands at over 5%, and about 70% of the country’s population wholly depends on agriculture for employment, income and food security.

All those figures point to the importance, potential and growing significance of the country’s agricultural sector and despite the many challenges on the ground, small and large-scale local farmers continue to show resilience and contribute their fair share to the economy.

But the abovementioned potential and significance of the agricultural sector needs to be supported, harnessed and uplifted through adequate funding to reach new levels of productivity and economic impact. 

But farmers, especially communal farmers, are isolated from the best-paying markets because of a lack of infrastructure, and means that would enable them to bring their goods and services to thriving markets.

In most cases, lack of infrastructure contributes to post-harvest loss due to a lack of proper storage facilities, and that makes it difficult for our crop farmers to obtain the best prices for their produce.


Lack of facilities 

Lack of storage infrastructure also puts farmers under pressure to sell their products as soon as they harvest – and sometimes, they sell at ridiculously low prices.

From my own experience, coupled with my many escapades across the width and breadth of this beautiful country, I have come to the realisation that without adequate funding and tailor-made training solutions, communal farmers will always find the going tough.

It is no secret that most small-holder farmers lack critical inputs that can help them unlock the desired gains in productivity and income – and again, financing is central to all discussions that have to do with improving productivity and access to markets. 

When I speak of financing, I am not saying banks and other agencies operating in the agricultural space just recklessly put their money where there is no concrete business idea or where it does not make any business sense.

No; that is not what I am saying. 

There are other many ways to support and empower small-holder farmers, especially those farming in deep rural setups. 


Banks must do more

For instance, through their various million-dollar Corporate Social Investment (CSI) programmes, banks and like-minded companies can choose to assist our many small-scale farmers through donations of fertilisers, seeds, and tools and sponsor selected groups of farmers to attend basic training courses at various agri institutions and academies countrywide.

When we call for such support, it is not always about asking banks to part ways with your hard cash, but simply support our farmers through material means and otherwise.  Empowerment comes in different forms and ways. 

It is every farmer’s experience that financial institutions generally do not want to provide financing to small-scale farmers because they see this category of farmers as either too risky or they do not offer the specialised financial products needed in the sector. 

Also, as can be expected with communal farmers, they run their farming enterprises outside the formal economic sector and frequently do not have the required means, such as collateral, to secure loans or other financial support from banks. 

As a result, farmers are forced to turn to informal financing solutions, which do not work in their best interest many a time. 

I have also noticed that there are cultural barriers among rural farmers, as many are reluctant to take on loans or other financial products due to a lack of information and exposure.


Assist farmers

I must, therefore, use this opportunity to urge and call upon all commercial banks to please introspect and start coming up with rural-focused financial solutions for small-holder farmers, who are trying their very best to reach the formal markets but lack the needed support.

As earlier put forth, it is high time commercial banks come up with flexible credit products that will give farmers access to the best seeds, fertiliser and related tools through a simplified credit scheme that will see farmers paying back throughout the farming season and at 2% or 3% interest. 

I am suggesting the above because the sector is currently characterised by low yields and slowing levels of income. 

In fact, successful farming enterprises have shown that if small-holder farmers have access to improved inputs – seeds, fertilisers, knowledge and training – they can increase yields and improve incomes. 

It is not just up to the state-owned Agribank, but all commercial banks have a moral responsibility to become innovative and provide funding to our farmers through concessional finance.

Until next time we meet in the kraal, bye-bye!