The Agricultural Bank of Namibia (Agribank) has facilitated 6,772 jobs and served 1,600 clients, boosting the country’s agricultural sector in the past four years.
Agribank’s Manager of Research and Product Development Indileni Nanghonga, recently at an SME engagement hosted by the Economic Association of Namibia, provided insights into the bank’s work, its growth and its impact on the agricultural sector.
Agribank, a state-owned institution, operates under a mandate to boost agricultural growth through affordable financing solutions.
“We aim to provide funding at lower rates than you’d typically find in the open market. Our loan book currently stands at N$3.7 billion, and we’re expanding our presence with eight branches nationwide, including a newly launched branch in the south,” Nanghonga explained.
Agribank’s services focus exclusively on agriculture and related activities, funding the entire value chain from primary production to essential infrastructure.
The bank offers loans for various agricultural needs, such as vehicles and equipment necessary for productivity, with a strong focus on supporting smallholder farmers.
“We frequently get asked whether Agribank funds projects like housing, but our focus is solely on agriculture and agriculture-related activities. We provide funding across the value chain, from primary production to infrastructure, and offer loans for vehicles and other essential equipment, as long as it’s agriculture-related,” Nanghonga noted.
A critical segment of Agribank’s portfolio is its support for small and medium enterprises (SMEs) and organised farmer groups.
“Our loan book primarily serves individuals and households, but we are moving toward supporting more SMEs and organised groups, especially smallholder farmers. For example, we provide production loans for startups in horticulture and agronomy, covering expenses like seeds and fertilisers,” Nanghonga said.
She noted that to enhance the skills of farmers, Agribank also offers extensive capacity-building services.
Through mentorship programmes and training, the bank ensures farmers have the knowledge to effectively manage their operations.
“Often, farmers receive funding but may lack the knowledge to effectively manage their operations. Through our advisory services, we provide one-on-one mentorship with 14 mentors across the country,” Nanghonga highlighted.
Agribank’s loan disbursements have increased significantly, with 2024 marking a record year. This growth is partly attributed to initiatives like the Women and Youth Loan Scheme, which supports financial inclusion by offering relaxed collateral requirements and encouraging young people and women to engage in agriculture.
Agribank collaborates with the Ministry of Agriculture on programmes such as the Post-Settlement Scheme, providing favourable loan terms to resettled farmers.
This scheme has supported farmers with N$17 million in funding over four years, enabling them to expand their operations with subsidised loans.
“We also work closely with the government, particularly with the Ministry of Agriculture, on collaborative programmes like our Post-Settlement Scheme. This programme offers resettled farmers a loan of N$200,000 at a favourable 4% interest rate, thanks to the government’s support,” Nanghonga mentioned.
Agribank’s SME loan portfolio, while modest, contributes to employment growth with clients creating both permanent and seasonal jobs, particularly in agro-processing and milling sectors.
These sectors help increase value-added agriculture, which boosts local food security and market expansion.
“Our SME loan portfolio has seen growth, particularly in 2023. Although the number of SME clients is modest, 12 clients in SME loans and 11 in agro-processing, these clients create significant employment opportunities,” Nanghonga noted.
Nanghonga notes that Agribank continues to champion financial literacy and debt management, working with institutions like DBN to offer essential skills training for smallholder farmers.
“These programmes aim to support farmers in running sustainable businesses and adapting to the challenges of the agricultural sector,” she said.
