AgriBank Ups Rates

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By Mbatjiua Ngavirue Windhoek The Agricultural Bank of Namibia (AgriBank) yesterday announced that it is increasing its monthly compounded interest rates with effect from July 15, 2006. The AgriBank increase follows hot on the heels of the Bank of Namibia’s 50 basis point increase in the bank rate – the rate at which it lends money to commercial banks. The AgriBank interest rate on long-term loans was increased from 9.5% to 10.25%; medium-term loans from 10% to 10.75%; short-term loans from 11% to 11.75%, and National Agricultural Credit Programme (NACP) loans from 9.5% to 10.25%. AgriBank said the increase in their rates was a direct result of the 50 basis point increase announced by the Bank of Namibia on June 8, 2006. Chief Executive Officer of AgriBank Ambassador Leonard Iipumbu when approached for comment said the increase was unavoidable. “It must be remembered that AgriBank sources funds from commercial banks. If we don’t increase our rates a gap will be created, and who will fill that gap,” he said. Iipumbu stressed that the 50 basis point increase by the Bank of Namibia was something that affected not only AgriBank, but also all the commercial banks. Executive Manager of the Namibia Agricultural Union (NAU) Sakkie Coetzee said the AgriBank interest rate hike was meant to act as a buffer against recent Bank of Namibia increases. Coetzee added that the reason the AgriBank increase at 0.75% was slightly higher than that of the Bank of Namibia was because it probably had to take into account other earlier increases. “It will have an influence on farmers with big loans, especially their cash flow, but it is to be expected the bank will want to absorb the increase by commercial banks,” he concluded.

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