Development Bank says there is space for agri-enterprise financing
Development Bank of Namibia (DBN) Head of Marketing and Corporate Communication, Jerome Mutumba this week stressed that finance for direct agricultural investments is a mandate held by Agribank, but the bank can provide finance for agri-enterprise.
Explaining DBN’s definition of direct agriculture, Mutumba said it entails finance for land and agricultural inputs.
“However, agri-enterprise, consists of adding secondary value to agricultural operations, as well as resource transformation of agricultural produce and Development Bank will consider finance for agri-enterprise,” he explained.
The bank’s finance for agri-enterprise is split into three distinct fields as follows:
Firstly, the agri-industry is an enterprise activity that manufactures products to support agriculture, such as fertilizers and feeds. This category might also include professional services to agriculture, such as veterinary services, welding and fabricating, and mechanical repairs, he continues, alluding to the Bank’s skills-based finance for young professionals and artisans.
Secondly, agri-processing consists of transforming and marketing the products of stock farming and horticulture, with finance for items such as mills, feedlots, abattoirs, dairies, processing facilities and transport and logistics assets.
Thirdly, the bank’s climate adaptation facility. Infrastructure financed under this facility might include solar power, water storage and water distribution for larger agricultural enterprises.
“The bank has a strong track record in the field of agri-enterprise, including finance for abattoirs, feed lots, dairy production and milling plants. The Bank sees agri-enterprise as a growth area,” Mutumba added.
Talking about the bank’s rationale for participation in the field of agri-enterprise, Mutumba said that Namibia has prioritised food security since its inception through manufacturing, as well as long-standing support to commodity level processing such as milling, for instance.
Mutumba said that with the supply chain crisis as well as current pressure on grain and oil used in food preparation, support for agri-enterprise is more important than ever before.
“Given Namibia’s challenge to substitute grain and cooking oil production, it has become all the more important to find means to stimulate the production of local foodstuffs that can be used as nutritional substitutes for imported agricultural commodities,” he said.
Given the reported waste of approximately 45% of horticultural foodstuff due to a shortage of processing and packaging, he added that finance for value-adding through manufacturing, transport and logistics can also enhance food security.
Meanwhile, Mutumba said, he acknowledges the challenges faced by smaller farmers but said the bank advocates that networks of small farmers establish companies, in which they are shareholders, to spread collateral and owner’s contribution requirements, as well as to ensure that consistent and sufficient supply of products is available.
“If you are in the field of agri-processing, or any form of value addition to agricultural produce, and have a viable business plan, approach Development Bank to see how we can support your growth,” Mutumba concluded.