23 February 2018

Namibia: Agribank to Repossess Farms

AGRIBANK yesterday said it will repossess and auction off farms belonging to defaulters who owe the bank about N$500 million.

The bank's spokesperson, Rino Muranda, told The Namibian yesterday that farms would only be taken if the farmers fail to comply with the instructions from the bank and debt collectors hired by the bank to pay their arrears.

Agribank embarked on a debt collection campaign last year with the aim of recovering about half-a-billion dollars owed by farmers.

The Namibian understands that the bank has close to 6 000 clients, with a loan book value of N$2,4 billion.

The exercise involves negotiations between the bank and farmers to make arrangements on how to service their debts.

However, the bank's chief executive officer, Sakaria Nghike-mbua, said some farmers had not paid a "single cent" towards their debts for the past five years.

The bank has thus started to list defaulters on the Information Trust Corporation (ITC) because they have refused to honour their agreements with the bank, and have "continuously ignored our invitations" to find an amicable way on how to service their debt.

Nghikembua added that farms would only be taken if the "customer decides to stay away from their agreement. We are not offering grants. Therefore, we have to recover the money we are investing".

"Unfortunately, the law has to take its course because the bank needs to be financially sustainable as well. It is public money that we are lending out, and we must collect that money," he stressed.

"It is not our desire to repossess the farms. We only want to collect the outstanding money. The sad thing is that some farmers are not even making any efforts to come to the bank for arrangements," he noted.

Although the bank's chief said there was progress in the debt collection process, the bank has only collected about N$100 million from defaulters since they started the initiative last February.

Nghikembua added that the farmers who are experiencing difficulties with repayments were encouraged to make "practical, fair and reasonable repayment arrangements" with the bank, but some failed to make such arrangements.

"It is, therefore, important that they approach us as individuals so that we can sit down and attend to their cases. This way, we can conclude appropriate repayment arrangements," he stated.

A group calling themselves "previously disadvantaged farmers" has expressed disappointment with the new approach by the bank of blacklisting defaulters on ITC, saying that it is instead blocking their ability to get financial assistance to pay off their debts.

The farmers, who spoke to The Namibian on condition of anonymity, said they have been approaching the bank on several occasions, but their bids to make arrangements on how to repay their loans were repeatedly referred to the debt collectors, whom they say asked them to pay the debts "in full".

"We feel that the bank is not being fair to us because when we try to engage them with proposals on how we intend to pay off our debts, they just refer us to the debt collectors, who are forcing us to pay the arrears in full," one of the aggrieved farmers said.

Some of the proposals put forward by the farmers include negotiating with the bank to consolidate, re-stock and restructure current and previous loans to previously disadvantaged farmers "to allow for better recovery and debt repayment ability".

The farmers also want the bank to review its grace period before the commencement of the repayment of the re-structured loan to allow sufficient time for the production and marketing of newly acquired livestock.

The Namibian reported last year that Agribank was told by auditors to review its loan repayments' grace period, and improve the system of capturing loan securities to avoid losses.

Auditor general Junias Kandjeke said the 12 months' grace period was too short for beginners as it leads them to fall into arrears due to a failure to pay back the loans.

Muranda yesterday said the bank had adhered to all the auditor-general's recommendations, and had already extended the grace period to 24 months.


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