AgriBank to Audit Commercial Farms

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By Petronella Sibeene WINDHOEK The Agriculture Bank of Namibia (AgriBank) has embarked on an initiative that will determine whether some 600 commercial farms scattered around the country are being used productively. In an interview with New Era, Chief Executive Officer of AgriBank Leonard Iipumbu said the financial institution recently introduced what he termed “Know Your Customer Initiative”. The initiative which forms part of AgriBank’s new strategy entails collecting data on the problems that hinder farms from being used to maximum production. Through its branches, the institution already started collecting data using questionnaires as a tool. “The data collected will determine whether farms are run to their full capacity,” revealed Iipumbu. He added that the data will also help the bank identify which farms are underutilized and perhaps consider repossessing them so that they may be reallocated to people who will use them productively. “We would like to see a reasonable number of farms visited. We wish by the end of this year to collect enough information that will enable us determine not only the needs of these farms but also problems faced,” he said. The initiative will also facilitate the quick recovery of money owed to the bank. Based on its loan book, the bank is owed N$1.3 billion. He added, “All clients who owe the bank must know that they have to pay, including corporate loans.” Though the amount is huge, Iipumbu says the bank has of late reported an improved recovery of funds. Meanwhile, the CEO also said since January, the bank received around 250 applications for new loans. With N$20 million set aside for new applications, the bank might only be able to process these applications now considering that approval involves assessment by other stakeholders. Most of these applications received, Iipumbu revealed, are production loan applications mainly for livestock and improving infrastructure on existing farms. He says it is part of the bank’s strategy to allocate or approve applications that deal with production, as there is a great need to improve the current production capacity on farms. Agribank is looking at clients that are producing and Iipumbu says this will increase food security. However, proper channels would have to be followed before the bank approves the applications. Last month, the bank announced that it will not issue any loans under the Affirmative Action Loan Scheme (AALS) given the need to clear a backlog of N$17.2 million. According to Iipumbu, most members of the public seem to have misunderstood the moratorium placed on the AALS. He says the moratorium does not mean that the bank is not accepting any new applications but that it only attends to these after clearing the backlog. The public, Iipumbu added, should understand that Agribank sources funds from other financing institutions, hence such measures are undertaken to avoid creating an “unaffordable” situation for the bank in terms of repaying funds it sources from other institutions.