Agribank advanced N$358 million worth of new loans in the financial year ended 31 March 2018, up 18% on N$304 million in the prior year. This was one of the many achievements highlighted by the bank’s chief executive officer, Sakaria Nghikembua, at the bank’s annual general meeting held on 26 September 2018. The bank also received a clean bill of health, receiving an unqualified audit from its external auditors for the year. This achievement followed intensive clean-up by the bank, after a qualified audit in the year ended 31 March 2017 because of legacy issues related to collateral securities records. Agribank is one of few public enterprises in Namibia which produce audited annual financial statements within six months of financial year-end.

At the occasion, Nghikembua informed stakeholders that the bank delivered on most of the promises made at the last annual general meeting, despite a difficult operating environment. He revealed that the bank grew its loan book by 6% year-on-year, from N$2.61 billion in 2017 to N$2.77 billion in 2018. Interest income on loan advances grew by a somewhat slower 4%, from N$167.5 million in 2017 to N$173.7 million in 2018. The slower growth in interest income, compared to the loan book growth, was as a result of the bulk of the disbursements for new loans occurring only in the last five months of the financial year. According to Nghikembua, the bank recorded a N$29.8 million overall surplus for the year. Whilst this remains a positive achievement, an increase in provisions for bad debts on loans advanced reduced the surplus level compared to the N$99 million achieved in the prior year. This is because the level of arrears remains relatively high.
The Agribank chief also noted that the bank had made good progress in slowing down the rate of increase in operational expenses over the past three years, moving from an annual increase of 17% in FY 2015/16 to 11.3% in FY 2016/17 and 7.5% in FY 2017/18.

According to Nghikembua, the biggest portion of the new loans went to farmland purchases, followed by large stock loans, consolidation of debt and seasonal production loans. The Khomas region received the highest allocation of loans at N$61 million, closely followed by Otjozondjupa (N$60 million), Hardap (N$40 million), Omaheke (N$39 million), with Oshikoto (N$31 million) completing the top five regions for collateral-backed loan disbursements. In contrast, the Zambezi region received the highest disbursements for the newly introduced no-collateral loan product at N$6.5 million, followed by Omaheke (N$3.9 million), Kavango (N$2.7 million), Oshana (N$2.6 million) and Ohangwena (N$2.4 million) respectively. In total, N$26 million worth of no-collateral loans were disbursed during the financial year. The bank has experienced more impressive growth in this loan product subsequent to financial year-end.

Statistics revealed at the AGM further show that the youth (up to age 40) received 27% of the total new loan funding from Agribank, while 36% of the funding went to people within the age group 41 – 60. The balance went to either clients above the age of 60 years or to registered legal entities.

“As a member of the Association of African Development and Finance Institutions, we rate ourselves in three core areas of governance guidelines, financial prudential standards and operational guidelines and I am pleased to announce that Agribank obtained an overall score of 78.4% in 2018, compared to 77.2% 2017”, Nghikembua stated, adding “this score is reviewed annually by our external auditor and has significantly improved from 64% in 2015/16 to current levels. The improvement means that the bank has been consistently enhancing its operational efficiencies, governance standards and financial management policies and practices”.


Nghikembua was also upbeat that the bank continues to make a consistent developmental impact in up-skilling and building capacity of farmers, noting that more than 5,000 farmers benefitted from the bank’s advisory services during the year through training, mentorship, lectures and farmers information days. “We need to assist more emerging farmers gain skills and knowledge to improve their productivity, increase production, employ more people and contribute to economic expansion”, Nghikembua enthused.

Meanwhile, he reiterated that the bank has to manage a tight liquidity situation because of the high level of arrears and declining treasury transfers, specifically over the past three years. The high cost of funding when raising capital in the market is another challenge that is likely to impact on the developmental mandate of the bank as its interest rates will require on-going upward reviews. Nghikembua however expressed confidence that these challenges can be addressed through a prudent mix of funding sources to keep Agribank lending rates affordable and sustainable in the long-term.

At the occasion, Dr Michael Humavindu, who chaired the AGM, stated that the bank has covered significant ground in creating a platform to make a meaningful contribution to the economy. “We are on course to play our part fully in the economy. As we do so, we remain grateful for the shareholder’s support and that of our other strategic stakeholders”, stated Dr Humavindu. He added that although the bank is facing liquidity constraints, it is implementing different strategies to alleviate liquidity pressure in the short-term and eliminate it in the long term. “We have continued our efforts to ensure financial sustainability. Collection efforts continue, despite all the odds, and we are on a trajectory to grow the loan book through new business”, he stated.

On his part, Finance Minister Calle Schlettwein, commended the bank for its efforts to diversify its loan book, noting that the bank plays an important role in the land reform process. According to the Minister, Agribank’s role is to service the agricultural sector in order to realise its optimal potential to create jobs, improve productive capacity and create wealth. Whilst commending the introduction of the agro-processing loan product, the Finance Minister also encouraged the bank to further develop financial products that will create value chains other than livestock and horticulture. Schlettwein further pledged his support to the bank, as it strives to fulfil its mandate in the land reform process in the country.

The Agribank AGM was attended by the shareholding Minister, Agribank board members and management as well as senior officials from the Ministries of Finance and Public Enterprises.

Issued by:

Sakaria Nghikembua
Chief Executive Officer

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Fax. 061 2074206

Two Agribank-financed farms will be auctioned on Friday, 27 July 2018. Both farms are in Otjozondjupa region and have already been advertised in local newspapers. The auctions follow hot on the heels of an announcement by the Bank that it had moved from a soft to a hard collections approach. Commented Sakaria Nghikembua, Agribank's chief executive officer "This is a last resort for us. There is no other option but to execute on the auction. The only thing that can stop the process now is payment of the arrears by the clients before the auction date. In the absence of that, the process will go through to the end".

Nghikembua added that these two auctions should not be seen in isolation but as part of an ongoing series. He emphasised that if clients persistently fail to honour their loan repayment commitments, the Bank will dutifully follow the same route. He added that the Bank had not only geared its internal structures to implement recovery strategies much faster than in the past but has also bolstered its collections efforts by recently adding new law firms to its legal collections panel.

Nghikembua once again appealed to clients to act before it is too late, saying "if a client waits until they are listed or until we have a judgement against them, it is too late. The best is to avoid these two situations by making repayment commitments and making every effort to honour such commitments".

Issued by:
Mr Sakaria Nghikembua
Chief Executive Officer

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Tel.: 061 2074332
Fax.: 061 2074206

In 2015, Agribank announced that it will launch a no-collateral loan product for full-time communal farmers. In response to the announcement, many farmers submitted their applications. Following a period of refinement which resulted in delays, the bank is pleased to announce that approvals for ERFP loans have commenced, with over N$1.2 million worth of loans having already been approved. The bank currently has loans worth N$25 million on its applications shortlist. These loans are at various stages of credit appraisal. The bank introduced the ERFP in response to market demand for collateral-free products for full time communal farmers. The newly approved ERFP loans were re-appraised against criteria set after a comprehensive review to ensure that adequate risk mitigating measures were put in place for this product.

Agribank wishes to inform the public that priority is first being placed on previous applicants, whose applications are being re-appraised anew to determine viability. Once the bank has dealt with the existing shortlist, it will then invite new applications for this product. Says Sakaria Nghikembua, chief executive officer of Agribank: ‘we are quite excited that this product is back on track following comprehensive review. In the interim, we had introduced the salary-backed no-collateral loan product which is doing very well. The ERFP takes care of communal farmers who do not have full time employment and also have no tangible collateral to offer against their loans. This is yet a further way in which we continue to catalyse the transformation of agriculture in Namibia’.

Issued by:
Sakaria Nghikembua
Chief Executive Officer

For enquiries, kindly contact the Marketing and Communication Division at:
Tel.: 061 2074332
Fax: 061 2074206

Over past 18 months, Agribank has requested defaulting clients to make repayment arrangements to settle their arrears. Some clients have heeded this call and have continued to honour their arrangements. Others have made arrangements and failed to honour them. And yet others have made no arrangements and no payments, ostensibly on the mistaken understanding that, being a state-owned bank, Agribank will not repossess their farms. The Bank wants to place on record that it is not its objective to auction any farms except as a last resort.

However, the bank believes that it has allowed for sufficient time to sensitise its clients about the imperative for them to honour their repayment obligations. The bank further believes that it has sufficiently indulged its clients not only to make appropriate repayment arrangements but also to honour such arrangements.

Agribank wishes to inform its clients that it is intensifying its efforts to move from soft to hard collections. This means clients not honouring their commitments will be listed on credit bureaus more swiftly whilst those persistently failing to honour their commitments will have legal action taken against them. A number of files have already been handed over to lawyers for legal action in this regard. The process has also been tightened to ensure that the bank takes legal action against defaulting clients more swiftly than in the past.

Against this background, Agribank once again appeals to its clients to ensure that they pay their instalments when due to prevent arrears; and in the event where a client is already in arrears, to make and honour repayment arrangements to prevent legal action, default judgement and auctioning of their farms.

The sustainability of the bank depends on regular and adequate repayments by clients on loans advanced to them. In the absence of such commitment, the bank will not be able to fulfil its mandate to provide loan financing to existing and new customers to transform agriculture.

Issued by:
Mr Sakaria Nghikembua
Chief Executive Officer

For enquiries, kindly contact the Marketing and Communication Division at:
Tel.: 061 2074332
Fax.: 061 2074206

Agribank has opened a new office in Gobabis in the Omaheke region this week. The office is situated in the Old Mutual Building in River Street and will serve clients in the entire Omaheke region.

Speaking at the official inauguration ceremony, Agribank chairperson Terttu Uuyuni stated that the Omaheke region plays an important role in contributing to the Bank’s loan book. “In the 2017/2018 financial year, Agribank recorded new business of over N$357 million of which the Omaheke region contributed N$40 million representing 11% of new business. This illustrates that Gobabis is a strategic growth centre for Agribank and we are confident that opening an office here will not only bring our services in town, but will create opportunities for Agribank’s growth”, Uuyuni enthused.

As part of its socio-economic transformation pillar of the strategic plan, Agribank provides training and mentorship services to farmers through the Agri-Advisory Services Division. During the 2017 – 2018 financial year, Agribank conducted 17 such interventions in 13 different locations in the Omaheke region, targeting both communal and commercial farmers. These interventions include farmers’ information days, evening lectures, short training courses, practical sessions and excursions which covered topics such as record keeping, animal health, as well as financial and grazing management. The Agribank chairperson was pleased “that 461 people benefitted from these interventions in the Omaheke region alone of which 329 were male, while 132 participants were female”.

At the same occasion, Finance Minister Calle Schlettwein, who officially inaugurated the Agribank Gobabis office, congratulated the Bank for expanding its footprint to strategic growth centres and bringing its services closer to their clients. The Finance minister also applauded the Bank for embarking upon the arrear collections strategy as part of its financial sustainability initiatives. “Gone are the days where treasury support to state owned enterprises went unchecked. In fact, going forward, Government will require commercial public entities to become self-sustainable although shareholder support can still be granted where necessary”, the Minister noted. Schlettwein further urged Agribank to continue to introduce new products that are responsive to the needs of the clients to accelerate the transformation of the agricultural sector.

Agribank loans can be utilized for purchasing farm land, production, livestock, farming infrastructure, vehicles and equipment, bush management, aquaculture, poultry, piggery, post settlement support as well as for value addition through agro-processing.

Issued by:
Sakaria Nghikembua
Chief Executive Officer

For enquiries, kindly contact the Marketing and Communications Division at:
Tel.: 061 2074332/Fax.: 061 2074206

In line with its strategic focus on employees, Agribank recently saw the first group of its middle managers complete a six months’ leadership training course. A total of 14 middle managers participated in the course which covered aspects such as leading self, leading change, leading others, leading performance and leading engagement. The theoretical training aspects were complimented by actual work application in-between the theoretical modules. The training is part of the Bank’s strategic people transformation agenda that is expected to result in a modern institution that is best placed to deliver superior customer service and effectively fulfil its mandate. Facilitated by the Organisational Development division of the Bank, the course was delivered in-house through the services of specialist training consultancy Capacity Trust.

Speaking at the certification ceremony, Agribank Chief Executive Officer, Sakaria Nghikembua, stated that “the Bank is committed to develop leadership and management capacity as well as create a pipeline of leadership competencies to guarantee business continuity at all times. This program had a tremendous impact on the business from the word go as it was a very practical process and demanded of participants to already apply their newly acquired knowledge and skills in the work environment”.

According to Nghikembua, the bank has implemented a well-managed performance management system that is focused on creating a culture of performance and service delivery in the bank’s quest to serve as a catalyst for the transformation of the agricultural sector in Namibia. It is for this reason that the next phase of training would focus on leadership development for Senior and Executive Managers within the organisation.

Issued by:
Sakaria Nghikembua
Chief Executive Officer

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Tel.: 061 2074332/Fax.: 061 2074206

Following a petition by a group of farmers who are in arrears with their loans, the governance structures of agricultural lender, Agribank, have reviewed the petition and have responded to the demands made by the ‘concerned’ farmers as per attached and signed response. Commenting on the bank’s response to the petitioners, Agribank chief executive officer, Sakaria Nghikembua, stated that “it is important to ensure that the bank is managed prudently for its sustainability. This is a cardinal principle from which we cannot detract. The only way this bank can be there for the future is by ensuring it is able to collect loans disbursed and do everything necessary to attain that outcome. We continue to invite clients in arrears to approach the bank for discussions related to their repayment arrangements. As far as practically possible, we would reach such agreements”.

See Attached and Signed Response

Issued by:
Sakaria Nghikembua
Chief Executive Officer

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Tel.: 061 2074332/Fax.: 061 2074206

Agribank has awarded full bursaries to three first-year students studying at the University of Namibia as part of its corporate social responsibility initiative. The bursaries cover tuition fees, academic books, accommodation, meals and academic expenses like examination fees.

Speaking at the award ceremony, Agribank chief executive officer, Sakaria Nghikembua, stated that Agribank’s vision is to serve as a catalyst in transforming the agricultural sector. “Transformation is effected by the Bank in many forms, primarily through agricultural loan financing, but also through capacity building – in this case funding tertiary studies”, Nghikembua noted.

According to him, “the ultimate aim is to produce graduates who can innovate and transform the agricultural sector, and to shape the perceptions of the upcoming generation to see agriculture as a critical pillar of the economy.” Nghikembua urged the beneficiaries, who are pursuing undergraduate studies in crop science, fisheries and aquatic science as well as veterinary medicine, to study hard and be good brand ambassadors of Agribank.

Whilst beneficiaries are not obliged to work for Agribank after graduation, they are expected to work in Namibia for a number of years equal to their bursary years.

At the occasion, Nghikembua further revealed that the Bank has spent over N$1 million on corporate social responsibility initiatives in the financial year ended 31 March 2018, which include supporting agricultural shows, agricultural related training activities, farmers’ information days, farmers’ unions and financial literacy, amongst others.

Issued by:
Sakaria Nghikembua
Chief Executive Officer

For enquiries, kindly contact the Marketing and Communications Division at:
Tel: 061 2074332/Fax: 061 2074206

Interest rates for some Agribank products will see a modest increase of 0.50 percent (50 basis points) effective 1 December 2017. The Bank’s interest rates have not been adjusted since November 2013.

Notwithstanding the increase in some products, the Government subsidised interest rates will remain unchanged at 4%, while penalty interest rate on arrear balances will similarly also remained unchanged at 2%. Overall, Bank’s interest rates remain competitive relative to the market.

Subsidised loans are loans to communal farmers under the National Agricultural Credit Programme (NACP) and resettled farmers under the Post Settlement Support Fund. The NACP was established in 1995 for communal farmers to access credit in order to increase food production and become surplus producers, create jobs and alleviate the cycle of poverty. It also serves as a preparatory stage for small scale farmers in communal areas before they could be considered to qualify for the purchase of commercial farmland under the Affirmative Action Loan Scheme (AALS).

The new interest rates per loan type are indicated in the table below:

PLANTING SEASON TIPS FOR FARMERS
The season for planting has officially arrived and farmers should be busy preparing the land for cultivation and planting of grains like pearl millet (Mahangu), sorghum, maize and vegetables like, pumpkin, runner bean, water melon and tomatoes. Establishing a crop means that seeds or seedlings are placed in the ground at a certain time (referred to as planting time). If the crop establishes itself poorly, the yield potential is immediately limited.

Thus, a significant relationship exists between the time you plant and the crop yield you obtain. To ensure that the optimum yield is realised, crop producers need to take into consideration factors such as the correct time for planting, the plant spacing and the depth of seeding (sowing depth).
Planting time.

For most crops there is an optimum time for planting, which depends on the climatic conditions and the time taken by the crops to reach maturity. For summer crops, such as maize, pearl millet and cow pea, early planting at the beginning of the rainy season is desirable as yields decrease with late planting. If planting commences late, the crop is likely to not reach its full physiological stage due to fewer days remaining for it to reach maturity.

Plant spacing
The spacing of plants refers to the distance between rows and between plants in the row. The closer the spacing, the greater the number of crops that can be planted per hectare. However, too close spacing results in competition among crops and diseases and pests can spread quickly among the crop population. The ideal plant spacing depends on the type of crop, variety and the climatic conditions such as rainfall and water availability. Tomatoes may be grown at closer spacing of 5 cm apart, whereas crops like runner beans require 30 cm spacing in-between. In drier areas, wider spacing is preferable in order to provide more soil water to the individual crops. In high rainfall areas, or where there is irrigation, closer spacing is possible.

Sowing depth
The sowing depth of a crop depends on the size of the seed, the type of soil and the weather. Generally, smaller seeds are sown at a shallower depth than larger seeds, while the deeper the seed is planted, the longer it will take the seedling to emerge and the weaker the plant will be at emergence (which may reduce plant vigour and

yield). Seeds may be planted deeper into sandy soil or in the case of dry planting i.e. planting before the rainy season. An important point farmers should remember when planting is to ensure good seed-to-soil contact as this enables the necessary absorption of water by seeds, which initiates germination.

To achieve an optimum crop harvest, do not crowd seedlings or plant them too close to each other. Give the plants sufficient time and space to reach their full potential and avoid deeper seeding in heavy soils.
This article is compiled by Ms. Emilie Abraham, Technical Officer: Crops within Agribank’s Agri Advisory Services Division.

Issued by:
Marketing and Communication Division

For enquiries, kindly contact the Marketing and Communication Division at:
Tel.: 061 2074332
Fax: 061 2074206