FINANCING OPPORTUNITIES FOR CONSERVATION AGRICULTURE INCLUSIVE FINANCING OF
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FINANCING OPPORTUNITIES FOR CONSERVATION AGRICULTURE INCLUSIVE FINANCING OF THE VALUE CHAIN FOR WEALTH CREATION by Regan Mwazi General Manager: Corporate Services 21 October 2015 10/30/2020 1
Mandate The Agricultural Bank of Namibia Act N 0. 5 of 2003 (as amended in 2004) mandates the bank to advance money to persons or financial intermediaries to promote agriculture and activities related to agriculture. 2
MISSION To promote agriculture and its related activities through affordable and sustainable financial solutions towards socio-economic development in Namibia. VISION To become the financial institution of choice in the development of agriculture and its related activities. 3
Loan Product Types Short Term Loans: Repayable between 1 – 5 years Productions Loans (livestock, horticulture and cereal crop) 1 – 5 years. Interest rates range - 8. 50% for commercial and 4. 00% for communal and resettled farmers. Medium Term Loans: 5 – 10 years (8. 25% & 4. 00%) - Infrastructure and Implement Loans - Improvement Loans - Vehicle and Tractor Loans -Alternative Energy – Solar System - Livestock Loans - Poultry Loans Long Term Loans: 10 – 25 years (8. 25% & 4. 00%) - Purchase of Farmland - Bush encroachment or deforestation of dry land for farming operations - Corporate Loans: grapes, dairy, pigs - Infrastructure Loans 4
Post Settlement Support Fund (PSSF) The Ministry of Land Resettlement and Agribank signed a memorandum of understanding in 2009 which established a three year PSSF of N$20 million to provide credit to resettlement farmers at affordable interest rates of 4% without any collateral requirements. To date more than 700 resettled farmers have benefitted to the total amount of N$ 50 million 5
COOPERATIVE FUNDING The Ministry of Agriculture, Water and Forestry (MAWF) established the cooperative fund administered by Agribank to provide credit to cooperatives at 80% guarantee in collateral requirements at affordable interest rates. 6
Farmers Support Project (FSP) Training of farmers to gain skills has become a vital component of the Land Reform Program. Agribank and the Gessellschaft fur Zusammenarbeit (GTZ) signed the financing agreement for the implementation of the Farmers Support Project (FSP) in Namibia. . 7
Challenges: - Collateral Branch Distribution After-care services Arrears 8
Emerging Farmers Retail Financing (ERFP) Piloting new products with minimum or no collateral requirements. • Intermediary Financing. • Financing Entrepreneurs to take services to the people. • Asset Financing. • Mentoring & Monitoring programme to reduce risk • Going Forward: Balance-Sheet Financing 9
Thank you!!! 10
