WINDHOEK – Finance minister Calle Schlettwein says the state-owned Agribank is not a charitable organisation and, thus, farmers who have outstanding loans with the bank must honour their contractual obligations.
Schlettwein said this at the inauguration of the Agribank Gobabis branch in the Omaheke Region recently.
Agribank earlier this year said it is owed monies in excess of about N$500 million by emerging black commercial farmers.
Last year it hired Red Force Debt Management and United Africa Group (UAG) to recover money owed to it by farmers.
Schlettwein applauded the bank for embarking on an aggressive arrear collection strategy as part of its financial sustainability initiatives and ensuring liquidity to serve more and more clients. He said he is aware that this strategy was not well received by some of the bank’s clients who made their feelings known through various public platforms.
“In the interest of future sustainability of the bank, in the interest of responsible lending and borrowing, I which to reassure Agribank that you have the ministry’s support to continue with arrear collection since these were loans that were advanced to clients and need to be paid back,” he said.
“Please remember, a loan not repaid is an opportunity foregone for another possible client and agricultural entrepreneur,” he said.
He said Agribank works with public funds and is therefore equally held accountable for its efficient, prudent and effective use.
Schlettwein urged Agribank to continue to engage the affected clients in order to reach practical, fair and reasonable repayment arrangements.
Furthermore, Schlettwein said owning a farm or land in Namibia can no longer just be considered as a life-style choice or a wealth symbol, or even a retirement insurance.
He said agricultural land owners, developers and farmers must see themselves as agricultural enterprise leaders, who actively and positively contribute to the overall production output of the country’s economy.
“Especially land bought with credit must be productive, else it becomes a national liability.”
He added that farmers and land owners need to diversify their agricultural production system, move into value addition and increase output.
Schlettwein said the government has enabled Agribank to stand by the side of producers or farmers.
“Many new loans products have been developed and brought to the market by Agribank that seek so support the agricultural development process since the recent years,” he said.
According to him, he still remembers vividly, that in the early 1990s, Agribank, then known as the Land Bank, put its prime focus on land purchase and a handful of other lending products.
However, today, 28 years later, the lending product portfolio hails over 20 such products to choose from, which can be combined to best fit the farmer’s production needs, on a short and long term.