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FARMLAND AUCTIONS, THE BANK’S LAST RESORT, NOT THE FIRST
12 Aug 2025
In the
recent past, Agribank has observed claims alleging that the Bank is targeting farms
owned by previously disadvantaged Namibians for auctions and is undermining
objectives of the National Land Reform Programme. These claims are misleading
and do not reflect the
Bank’s intentions to provide financial solutions and services towards supporting
the agriculture sector. Our
Mandate if to empower, not to auction farms
Agribank
is a development finance institution, established by an Act of Parliament, the Agribank
Act, 2003 (No. 5 of 2003). This Act mandates Agribank to advance loans to
persons
engaged in agriculture and activities related to agriculture. In accordance
with the provisions of the Act, the Bank is empowered to secure repayment of
funds advancedby
Agribank through registration of collateral. Where
loan defaults occur, and all reasonable collection efforts have been exhausted,
the Bank is empowered to repossess secured assets. Such repossessions typically
occur through public auctions. However, this is newer the Bank’s preferred
course of loan recovery action.
It is
imperative that our stakeholders understand that the Bank’s operating model is
based on advancing loans and recovering such loans when they fall due. Therefore,
the sustainability of the Bank depends on commitment to loan repayment by the
clients. Failure of clients to meet loan repayment obligations means the Bank
will not be able to extend loans to more customers in
future,
especially the youth and emerging farmers seeking to develop and grow their
agriculture enterprises.
Capital
injections, whether through government transfer or debt from financiers, are
only part of the banking equation. Lenders
and shareholders of Agribank expect these funds to be repaid back and recycled
to support future generation of farmers. When defaults increase and recovery
prospects diminish, the Bank’s creditworthiness is affected, making it more
difficult to raise additional funding required to transform the agriculture
sector. In today’s fiscal environment, Agribank must strive to remain self-sustaining. Support
to clients
At
the Bank, we understand that that majority of our clients operate in a
challenging environment mainly characterised by harsh climatic conditions and
changing economic conditions. As such, the Bank remain flexible in aligning
repayment terms to cashflow cycles, offering loan restructuring and relief
programme to clients. Similarly, the Bank encourages clients, especially those
with multiple income streams to make regular repayments towards reducing their
loan instalment rather than waiting for the loan to fall due and payable. In certain cases, this is now implemented as
a condition of loan approval, fostering responsible financial behaviour. The
Bank also offers voluntary advisory services and training to help clients
strengthen their farm management and financial planning skills. These services
are offered at no cost, as part of the Bank’s commitments towards improving
productivity and income growth of farming enterprises. Dialogue
before hard collection actions
In
cases of default or imminent default, Agribank initiates recovery efforts
through dialogue. The process begins with direct engagement to understand the challenges
and explore viable solutions. Some of the available options include repayment arrangements,
loan restructuring or grace periods where possible. We would like to put it on
record that farm auctioning by Agribank is not our objective, but the last
resort. Farm auctions are pursued in cases when:
Client
fails to engage and respond to bank’s communication
Repayment
arrangements are made and not honoured
No
payment arrangements made at all
No
payments havebeen made
to the loan since disbursement Calling
on clients to engage
Agribank
wishes to reiterate that non commitment to loan repayment obligations
undermines the Bank’s development mandate and puts future generations at risk
of not having access to affordable agriculture finance. The financial
sustainability of the bank depends on clients honouring their repayment
obligations.
The
Bank is therefore open and ready to engage with all clients and strongly call
on clients to initiate dialogue long before matters escalate to legal
enforcement. Early engagement allows the Bank and clients to explore practical
solutions either through restructuring, revised payment plans, access to
advisory support and other feasible options. Proactive engagement and early
actions can prevent debt from accumulating beyond control, making it easier to
reset or turnaround the farming operation.
In
conclusion, at the Bank we believe in co-creating solutions and are committed
to working with clients to turn the farms into productive assets. This is not
on with the view to protecting individual farmers but preserving the
sustainability of the bank for future generation. The sustainability of the
bank is therefore a shared responsibility.
END. Issued by:
Dr Raphael Karuaihe Chief Executive Officer
Namibia’s agricultural premier lender, Agribank, has commenced with the roll-out of the drought relief subsidy, which was announced by Hon. Iipumbu Shiimi, Minister of Finance and Public Enterprise (MFPE), during his budget speech in February 2024. The drought relief will be implemented effective today (10 July 2024), and it will be in the form of an instalment relief and a penalty interest waiver for clients.
First intervention: Based on the criteria agreed with MFPE, this intervention of instalment relief is limited to Agribank clients with farmland and livestock loan accounts. The instalment relief targets clients who are in good standing and whose instalments fall due from 1 April 2024 to 31 March 2025. Clients who fell into arrears between 1 April 2023 and 31 March 2024 will also be considered. Accounts of qualifying clients will be credited in full as and when instalments fall due, and past-due accounts will be credited with immediate effect. The total commitment for this intervention is N$104.6 million.
Second intervention: As a gesture of goodwill, Agribank offers to waive penalty interest amounting to approximately N$83 million for this financial year (April 2024 - March 2025) for all our clients that are in arrears.
"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", stated Dr Raphael Karuaihe, Chief Executive Officer.
For Agribank, our main and sustainable source of funds is loan repayments by our clients. This means that extending the same relief to all clients of the bank is unfortunately not a financially viable option at this stage".
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. We will continue to maintain a flexible approach in our discussions with individual clients in our attempt to find appropriate solutions in line with the Bank’s policies and procedures.
Issued by: Fillemon Nangonya PUBLIC RELATIONS OFFICER For enquiries, kindly contact the Marketing and Communications Division at: Tel.: 061 2074308 Email: info@agribank.com.na
The Agricultural Bank of Namibia (Agribank) is pleased to announce the introduction of a Credit Life Insurance product, effective 1 June 2024.The Credit Life Insurance serves as a financial security and protection against unforeseen events, tailored exclusively for Agribank clients.
The Agribank credit life insurance offers benefits beyond covering death and protecting a client’s estate. If a client becomes permanently or temporarily disabled, is diagnosed with a serious illness, or faces retrenchment, the insurance will cover the client's loan instalments for a specified period, providing essential financial relief during challenging times.
Moving ahead, Agribank hereby inform the public that the credit life insurance becomes a mandatory requirement for all eligible clients, effective 1 July 2024. However, applicants/clients will not be compelled to take up the Agribank Credit Life Insurance, but they do have an option of providing an alternative life cover from an insurer of their choice.
Similarly, existing clients with life insurance policies can continue to use their current coverage, although they are also invited to participate in the Agribank Credit Life Insurance program to enjoy its comprehensive benefits.
According to Chief Executive Officer, Dr Raphael Karuaihe, “The introduction of the Credit Life Insurance is a significant step forward for Agribank. It supports the sustainability of our clients' farming and agro-enterprise ventures by providing a financial safety net against unforeseen events. Furthermore, the initiative demonstrates Agribank’s dedication to offering innovative and affordable products and services.”
The Agribank credit life insurance is underwritten by Momentum Metropolitan Namibia Limited, while Agribank is designated to market and sell the credit life insurance to its customers.
If you are passionate about agriculture and are a biomass producer or processor, Agribank invites you to discuss our Biomass Financing Scheme, designed specifically for you! This scheme supports the production and processing of biomass products and related activities.
Why Biomass?
Farm income diversification
Sustainable job creation
Improved rangeland
Climate resilience
Who Qualifies?
Producers: An applicant (legal entity or individual) can be the owner of the farm or leasing a farm from which he/she can harvest biomass products. This includes commercial and communal farmers with approval from the Directorate of Forestry.
Processors: An applicant can also be a processor (legal entity or individual) who buys biomass products (e.g., retail shops/restaurants or export/import companies).
Loan Products
For Producers:
Working capital
Tractors / trailers
Storage sheds
Debushing equipment
Kilns
Personal protective equipment
Workers housing including clean water & sanitation
For Processors:
Working capital
General equipment & Vehicles
Maintenance workshop
Office to operate from
Charcoal processing plant
Warehouse & equipment
Loan Term The loan term is between 2-6 years, depending on the loan type.
Qualifying Criteria & Facilities Offered
For Producers:
No collateral is required if the client has an off-take agreement with a processor or retailer.
If there is no off-take agreement for biomass products, the client must provide collateral based on existing policy.
Loan payments are via monthly debit order.
Session of income / Tripartite agreement if debit order is not feasible.
For Processors:
Working capital: No collateral if there is an off-take agreement.
Capital investment loans are subject to collateral based on the principle of 100% Loan-to-Value.
All loan payments are to be done via monthly debit order.
Insurance Requirements
Insurance for equipment and plants is required and is the responsibility of the client.
All vehicles, tractors, and trucks must be insured from accident and veld fire.
Credit life cover is required as per the current arrangement of the Bank.
Interest Rate The minimum lending rate is 7%, and interest rates above 7% may be adjusted upwards as guided by the pricing policy.
Grace Period
3 Months for Equipment & Vehicles
6 Months for other loan types
Click to view or download the scheme and application form
What type of security must I provide for a loan at Agribank?
Loans are granted against
security of fixed property, investment or any other acceptable form of security
(fixed deposits, investments and surrendering value of policies). read more