Response to questions via The Patriot newspaper

02 May 2019

In our latest engagement with farmers from the "previously disadvantaged background" community in response to Agribank‟s formal position against the calls (via the media) by farmers to have collection of loans suspended, allegations have been raised that Mr. Michael Iyambo has been receiving preferential treatment at their expense.

Such allegations as are follows:
1. That the chairperson has a loan with Agribank amounting to more than N$20 million which he is struggling to pay back.
As a matter of policy, the bank does not discuss individual loan account details with third parties including the media as such information is confidential between the Bank and the individual loan holder. However, in this instance, we can confirm that Mr Michael Iyambo, who is also the Chairperson of Agribank Board of Directors, is a client of the bank. From the status of his accounts, the bank cannot classify him as „struggling to pay back his loans‟. The amount being quoted as being the loan advanced to him is also exaggerated. As a matter of policy, the bank treats Mr Iyambo‟s account in exactly the same way as it treats all other accounts. This means that he is expected to repay his loans or, if necessary, make appropriate repayment arrangements which he must honour. We do not have exceptions to this requirement and it would indeed be good to prove factually otherwise.

2. That the chairperson transferred his corporate loan to Bank Windhoek and back to Agribank when he became the chairperson, which got restructured
The bank competes with commercial banks for agribusiness on a daily basis. Towards this end, we have many clients whom the bank takes over from these competitor banks. Before we take over any loan, a thorough credit assessment of the client and his or her business is conducted. First, the branch takes in the initial application and conducts the initial analysis. Then the credit division does its assessment as well. Only after the application has passed that stage would it proceed to the management credit committee, the board Credit Committee and, depending on the amount in line with the financial delegation of authority, the full Board. Mr Iyambo‟s application went through all those credit appraisal loops, and was approved by the Board in 2017.
Mr Iyambo became 2 chairperson of the Board only in September 2018. The entire assessment process was done with the full recusal of Mr Iyambo, as per the bank‟s governance requirements. We wish to point out that Mr Iyambo‟s application was submitted and approved by the previous Board, of which he was not chairman. It is thus false to assert that he moved his loan to the bank when he was chairperson. Mr Iyambo previously moved his loan to a commercial bank because of poor service from the bank. However, the bank challenged him as to why he serves on its Board whilst supporting a competitor. The bank challenged him to at least subject himself to credit assessment and see if he would be successful with his application. We do wish to highlight that employees of the bank, as well as directors, are free to apply for loans from it. When they do, they are subjected to the same requirements and rigour, including full recusal. And the bank has the same repayment expectations of such employees and Board members.

3. That the chairperson was given an additional loan on top of this by Agribank
As you might be aware, Agribank is financing the full value chain of agricultural products and it is very common for one client to have multiple loans with the bank. This is the same with many of our clients specifically because the bank finances different products. For example, a loan for equipment would be different from a production loan or a loan for farmland. The client would thus apply for different loans and all these would go through the same process. All of Mr Iyambo‟s applications were done at the time of move-over. It is disingenuous to want to suggest something extraordinary here.

4. That Agribank allowed him to shift his installments three times and that these loans were not even 100% secured
I am sure the "previously disadvantaged farmer‟ knows the contents of the bank‟s credit policy. Assuming that knowledge, we can confirm that Mr Iyambo‟s application was assessed and approved in full compliance with the bank‟s credit policy. All our clients have an opportunity to be pro-active and request for a shift in their installments to be more in line with their cash-flow generation. This is an option that is well-known by our clients and by our employees, especially those who serve clients in the branches and credit departments. It is thus not an option peculiar to Mr Iyambo. As far as we know, the bank has only approved one installment shift for Mr Iyambo. There are requirements that must be met before such a shift can occur, however, and such requirements had to apply in the case of Mr Iyambo. The bank is not aware of three installment shifts nor has it approved any. Any requests from Mr Iyambo would be dealt with in exactly the same manner as any other client‟s request. Mr Iyambo knows and appreciates this fact; so do all employees dealing with applications of this nature. The bank has gone on record numerous times advising our clients to come in individually and make repayment arrangements that suit their unique circumstances. That call still remains and we continue to be accommodative to our clients who come forth to make the necessary repayment arrangements.

5. That the chairperson is using his influential position to be able to enjoy this kind of leniency from Agribank
This allegation is blatantly false. The bank has relevant governance structures in place to ensure that at all times its interest is not compromised. Such interest supersedes any individual interest. The bank has very clear policies and procedures that guide its operations from loan origination, credit assessment, disbursements and even collections. It is therefore unfortunate that the "previously disadvantaged farmer" is twisting facts and using his imagination to cast aspersions over the image of the institution, as well as over the reputation of the individuals mandated to lead the bank, with the sole hope that some decision-maker would one day believe in his story and hopefully remove the bank‟s leadership that is simply trying under very difficult circumstances to run a well-governed and sustainable organisation that can continue to fulfill its developmental mandate over the long-term. Our resolve is to ensure that Agribank is managed efficiently in a self-sustaining manner so that it can have a much wider and bigger developmental impact in its space and for that we will not tire.

6. Anything else you would like to add?
It is unfortunate that the so called previously disadvantaged farmer goes to the extent of trying to create a false impression that something is amiss and that the bank is providing preferential treatment to a client. Nothing could be further from the truth. Mr Iyambo is simply one of the clients who are trying to respond to the bank's call to ensure their repayment arrangements are in order. It is therefore far-fetched to suggest that a client is treated leniently for being proactive and responsive to the bank's one-going advice. We once again urge our clients, and in particular the so called previously disadvantaged farmers, to invest the same energy, zeal and determination, which they invest in trying to find fault with the bank through false means, to make arrangements to repay their loans. What is required is for clients to respect their commitments and make the necessary repayment arrangements, especially in this challenging year.

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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