Brigitte Weidlich
22 August 2008
The interest rates to be charged from farmers who will participate in Meatco's new Ekwatho financing scheme will vary from bank to bank.
Loans from Agribank will have the lowest rates charged.
Ekwatho was launched on Wednesday with Nedbank being the last of the four commercial banks to come on board, signing the agreement at the ceremony.
According to Heiner Boehme, Ekwatho Project Manager at Meatco, Agribank, the state-owned bank for the agricultural sector, charges 13 per cent interest, which is well below the prime rate of 15,25 per cent.
"The other interest rates at this stage are prime rate [15,25%] at First National Bank, while Bank Windhoek offers prime rate plus 1 per cent [16,25%]," Boehme informed The Namibian yesterday in an e-mail response.
"The other banks - Standard Bank and Nedbank - need to establish themselves first and work out their loan rates."
Under the Ekwatho scheme, farmers from the communal, emerging and commercial sector can apply for bridging finance to buy and raise cattle on their land for a period of about two years until the animals - usually oxen - reach slaughtering age.
Meatco processes the loan applications by qualifying farmers, who must fulfil specific criteria such as having good managerial practices, good grazing land and no criminal record.
Loans ideally stretch over the period until the cattle are sent to the abattoirs.
They will cover transport costs, fodder and veterinary needs of the cattle.
Meatco guarantees minimum slaughter prices, but these can be topped with premiums the company pays during some months.
There is no maximum amount that the applicant can apply for, depending on his or her assets and ability to repay.
Due date for payment is the day the cattle are slaughtered.
The difference between the slaughtering price and the loan amount is the profit for the farmers.
During the pilot phase of Ekwatho, which started last November, over 8 000 animals were bought for N$25 million.
Meatco intends to facilitate loans for 30 000 head of cattle until 2010, the first due date for slaughtering.
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