Agribank pins sluggish performance on drought
The Agricultural Bank of Namibia showed a sluggish performance in the first quarter of 2016, a situation it said came down to the drought of 2013. While the agricultural sector was showing slight signs of recovery, the Agribank was not translating this into more business for the bank.
Said Agribank this week, “despite the challenges experienced in the agricultural sector, Agribank showed sluggish performance in the first quarter of 2016. Farmland acquisitions loans took up the lion’s share of the total loans approved at 35%, followed by takeover debt from other financial institutions.”
Added Agribank, “total loans approved during the first quarter of 2016 decreased by 18% from N$87.4 million in the corresponding period of 2015 to N$72 million. The decline in loans approved is mainly attributed to the effects of drought, as farmers are cautious to take up new debt.”
Agribank continued, “to date, the total number of loans approved decreased from 144 in 2015 to 129 in 2016. This decline is due to the prevailing drought situation and the Foot and Mouth Disease, reducing the appetite for new loans.”
Another notable observation, the number of farms bought by Previously Disadvantaged Namibians declined 30% year-on-year, from N$36 million in 2015 to N$25 million. Said Agribank on the issue, “the reduction in the acquisition of farmland is mostly due to escalating prices of land per hectares and uncertainty created by climate change.”
A huge positive witnessed by Agribank was the huge uptake in the Drought Relief Scheme, aimed at helping farmers mitigate the adverse of the drought which saw a whopping 108% increase. A total of N$6.5 million was approved, against the previous period in which only N$3 million was approved, Agribank noted.