Nedbank Namibia has introduced a new and decentralised agribanking model, after identifying a need for increased financial support for small and medium agricultural enterprises (SMEs) to secure funding.
The Bank said its decision is supported by a study by Harvard Growth Lab that shows that local farmers struggle with unclear loan information, burdensome application processes, and a lack of regional bank representatives familiar with local needs to meet their financing needs.
According to Nedbank’s Head of Business Banking John-James Tromp, the new agribanking solutions will cater to various agricultural activities, including sustainable farming, game farming and forestry.
“Our agribanking products are tailored to the seasonal income of businesses, offering flexible capital repayment options, including monthly, quarterly, biannual or annual repayment,” he said.
Tromp further explained that the bank’s loan options include short-term working capital, asset-based finance for equipment and medium-term loans for necessities like livestock and seeds.
Long-term financing is also available for land acquisition and permanent improvements.
“Access to this type of funding aims to bolster agricultural productivity and sustainability in Namibia, bringing the country in line with global agricultural standards and mitigating the impacts of climate change on local farming communities,” he explained.
He also emphasised Nedbank’s commitment to aligning Namibia’s agricultural sector with global trends.
This includes a focus on sustainable practices like those employed during the Green Revolution – high-yielding crops, irrigation systems and innovative farm management techniques.
“To bridge this gap and promote sustainability, Nedbank offers renewable energy loans for solar panels, wind turbines, and other green energy initiatives. These loans aim to bolster agricultural productivity and mitigate the impact of climate change on Namibian farming communities,” he said.
Furthermore, he said government-owned entities shouldered the responsibility of financing agriculture.
However, he believes private banks have a role to play in democratising credit access, particularly for smaller-scale farmers in rural areas.
“Nedbank’s renewed commitment to Namibia’s agricultural sector aims to align the country with global agricultural trends,” says Tromp.
This comes as agriculture contributes over 8% to Namibia’s gross domestic product (GDP), with about 70% of the population dependent on it for income and food security.
Additionally, agriculture is the largest employer in the country, accounting for over a fifth of the local workforce.
