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Agribank delivers solid results

Premier agricultural lender, Agribank, recently announced a solid set of results for the year to 31 March 2019. Speaking after the bank's annual general meeting, chief executive officer Sakaria Nghikembua announced that despite the difficult operating environment, characterised by a severe drought and an economy in recession, the bank delivered a healthy set of results.

According to Nghikembua, Agribank's loan book grew year on year by 15 per cent, from N$2.4 billion in 2018 to N$2.8 billion in 2019. The growth in the loan book came largely on the back of new business growth. Disbursements were 22 per cent up on prior year, increasing from N$358 million in 2018 to N$438 million in 2019. As a result, interest income grew 14.5 per cent from N$189 million in 2018 to N$216 million in 2019. In general, provisions for bad debts on loan advances were well contained partly because of a steady hold on the collections rate and largely because of ensuring sufficient collateral cover for high-risk loan accounts. Expenses were well contained at a growth of 4.4 per cent whilst the bank's surplus increased 87 per cent from N$30 million in 2018 to N$56 million in 2019.

The Bank's total assets exceeded grew by nearly 7 per cent year on year and, exceeding the N$3 billion-dollar mark for the first time in history. Total assets stood at N$3.011 billion at the end of March 2019 compared to N$2.82 billion the year before whilst net assets grew 6.1 per cent from N$2.33 billion in 2018 to N$2.44 billion in 2019.
Turning to key strategic actions during the year, Nghikembua stated that the bank opened a branch office in Gobabis in Omaheke region as part of its strategy to be accessible to its customers. The bank continued to roll out its salary-backed no collateral product for communal farmers, disbursing N$26 million in new loans for this product during the year. Since launch in April 2017, the bank has disbursed a total of N$61 million in salary-backed no-collateral loans to communal farmers. In addition, the bank also introduced a no collateral loan product for full time communal farmers called emerging retail financing product in May 2018. A total of N$4.5 million was disbursed to communal farmers under this product during the financial year. The introduction of the two no-collateral loan products makes it possible for communal farmers to access funding for agricultural purposes.

The bank created and/or maintained 46,816 direct jobs in the agriculture in 2019, compared to 45,232 jobs in 2018. The bank thus plays a very important role in job creation, income generation and poverty alleviation. As part of its corporate social investments drive, the bank took 6453 farmers and farming employees through its training and mentorship interventions in 2019, registering a 27 per cent increase on the 5091 beneficiaries in 2018. The bank continued to sponsor three students in veterinary medicine, crop science and animal science at the University of Namibia whilst also investing in its employees through leadership development and skills-specific programmes.

Medium-term trends demonstrate that the bank is firmly on a positive trajectory. The rate of growth in interest income has changed from low levels on 1 per cent in 2015 and 2016 to 6.4 per cent in 2017, 12.8 per cent in 2018 and 14.5 per cent in 2019. The rate of growth in expenses on the other hand had decreased from high levels of 10 per cent and 17 per in 2015 and 2016 respectively to 11 per cent in 2017, 7.8 per cent in 2018 and 4.4 per cent in 2019. During the same period, the bank registered a consistently increasing surplus position, in line with its sustainability strategy. Collections have steadily grown from N$157 million in 2015 to N$296 million in 2019. Despite the current economic and climatic environment, reasonable progress continues to be me on the collections front as more customers positively respond to the call to service their loan accounts.

The bank's prudential ratings score has improved from 65 per cent in 2016 to 81 per cent in 2019, indicating demonstrable progress in governance, financial management and operational standards. The ratings are externally audited. Commenting on the bank's trajectory chief executive officer Sakaria Nghikembua indicated that despite environmental and internal legacy challenges, the bank is making good and rapid progress, stating 'good leadership at board level has been critical in ensuring we have the right strategy and the right people to make a difference. As the statistics show, the improvements have been all-round. We know it's been a challenging road and it will remain so for a long time yet but we are relishing the opportunity to serve and make a lasting impact by running a sustainable organisation’.

Issued by:
Sakaria Nghikembua
Chief Executive

For enquiries, kindly contact the Marketing and Customer Strategy Department at:

Tel.: 061 2074279 / Fax: 061 2074206

Deputy minister of finance urges farmers to support Agribank

The deputy minister of Finance, Natangwe Ithete has applauded Agribank for introducing no collateral loan products for both communal and commercial farmers. Ithete was speaking at the local economic revival conference for the maize triangle towns of Tsumeb, Otavi and Grootfontein last week.

The deputy minister highlighted the competitive interest rates offered by the bank and urged local farmers to support the bank through taking out loans and honouring the repayment of such loans. “The bank is not a profit making institution and the little interest that they charge is meant to recoup their operational cost and to ensure that there is money to on-lend to other clients to have a bigger developmental impact”.Ithete also defended the practice of advancing collaterised loans as it encourages loan holders to work hard and produce in order to repay their loans. “Collateral encourages to work hard to ensure that you do not lose your property for non-payment”, Ithete stated.

The deputy minister also defended the turn-around times of the bank, noting that whilst he understand that the loan turn-around times take a bit longer when compared to commercial banks, it is necessary to do proper due diligence to avoid over indebtedness that may lead to the borrower not able to service their loans. “It is only fair that proper due diligence is carried out to make sure that our people obtain loans they can afford and repay to ensure the bank is sustainable. I therefore urge all Namibians and especially the youth to support Agribank in its mandate to promote the growth of agriculture”, he stated.

The conference was attended by the political leadership of the Oshikoto and Otjozondjupa regions, senior government officials, youth and farmers from Otavi, Tsumeb and Grootfontein.

Issued by:

Rino Muranda
Manager: Marketing and Communication
For enquiries, kindly contact the Marketing and Communication Division at:
Tel.: 061 2074332

Opportunities to unleash natural resources

Namibia could be de-risked against erratic climatic conditions if it can sustainably tap underground water and create green zones as well as create a national climate resilience fund to smooth out the impact of climate volatility. This is the view expressed by Agribank Chief Executive Officer, Sakaria Nghikembua, at the recently concluded Economic Growth Summit in Windhoek.

Nghikembua explained that the country should exploit underground water resources to create green zones and turn traditional crop fields into all year round grain and horticulture sites. He asserts that through the extraction of water from aquifers in Ohangwena, Oshivelo and eastern Zambezi, in addition to tapping water from the Kunene river and redistributing it throughout the northern regions, could encourage diversification of crops and growing fodder.

Nghikembua also referred to the lack of adequate agricultural statistics for northern communal areas. "We need to establish a credible system of collecting agricultural statistics in northern communal areas and plan on the basis of solid information in respect of livestock numbers and crop yields", he stated. Nghikembua further highlighted the current fragmented coordination of the agricultural sector which leads to split efforts and ineffective impact. The Agribank chief intimated that through national coordination, mentorship and training of farmers should be strengthened to improve rangeland management, crop yields, incomes and deliver a positive contribution to the GDP. He therefore calls for establishment of the Chamber of Agriculture to coordinate improved synergies amongst various stakeholders, most notably the government, agricultural farmers’ unions, financial institutions and donors. He highlighted climate resilience through diversification at farm level as an emerging opportunity to ensure that farmers can maximise their income streams.

Nghikembua is of the view that policy options on value addition should focus on competitiveness and sustainability of primary producers. "We need to ensure access to knowledge and skills, access to productive infrastructure such as irrigation, access to expansive markets domestically, regionally and internationally and that policies aid profitability of value-adders", he noted. According to Nghikembua, the overall policy should include incentives to produce, add value and create jobs rather than to force specific behaviors on producers.

Issued by:
Rino Muranda
Manager: Marketing and Communication
For enquiries, kindly contact the Marketing and Communication Division at:
Tel.: 061 2074332
Fax: 061 2074206

ERFP product for full time communal farmers gains traction

Agribank has approved loans worth over N$7.1 million for full time communal farmers under the Emerging Retail Financing Product (ERFP). The Bank introduced the ERFP in response to market demand for collateral-free products for full time communal farmers as part of its efforts to widen financial inclusion in addition to the No-collateral product for salaried employees.

The maximum loan amounts for ERFP is N$1 million at varying affordable and competitive interest rates depending on the merits of each business plan. Loans will be granted on the basis of the completion of the mandatory training and mentorship program in the production, management and marketing of the commodities of the undertaking. In addition, the applicants must be available for attachment to the Bank approved mentor.

The ERFP loans target full-time communal farmers already farming in areas such as animal husbandry for livestock farming, poultry farming for raising birds such as chickens, ducks, turkeys and geese, agronomy and horticulture for fruits, vegetables, nuts, seeds, sorghum, maize, pearl millet and mahangu as well as fodder production to supply feed to livestock. Applicants of the ERFP loans are required to submit a comprehensive business plan of which a template is available at all Agribank offices. The ERFP loans will be appraised against new criteria set after the comprehensive review of the product to ensure adequate risk mitigating measures are in place.

The Bank remains committed to implement innovative financing solutions to enhance agricultural production in line with the stated objectives of NDP5 and other national development goals.
Come one, come all to the nearest Agribank Regional Branches countrywide for the product that empowers full-time communal farmers at very competitive interest rates below the prime rate.

Issued by:
Rino Muranda
Manager: Marketing and Communication
For enquiries, kindly contact the Marketing and Communication Division at:
Tel.: 061 2074332
Fax: 061 2074206

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