The Agricultural Bank of Namibia’s (Agribank) salary-backed loan programme has created approximately 680 jobs for smallholder farmers and entrepreneurs in the country over the past four years.
Agribank Manager for Research and Product Development Indileni Nanghonga said the initiative, which has disbursed N$45 million in loans to 272 clients, requires no traditional collateral, with repayment secured directly through borrowers’ salaries.
“In addition to our conventional loan products, Agribank has introduced salary-backed loans and special women and youth loans. The salary-backed loans allow clients to secure funding using their salary as collateral, benefitting around 270 clients and creating about 680 jobs over the past four years,” Nanghonga said.
She said these loans help smallholder farmers gain secure financing without traditional collateral requirements, enhancing repayment reliability.
The programme forms part of Agribank’s broader effort to address financing challenges in the agricultural sector, particularly for smallholder farmers who often struggle to secure loans through traditional banking systems.
Agribank has also placed special emphasis on its Women and Youth Loan Scheme, designed to encourage greater participation by women and young people in agriculture.
“This loan scheme was introduced in the 2022 financial year to include women and youth who have traditionally been excluded from agricultural activities. The bank has financed at least N$165,883,200 for 177 clients,” she noted.
Nanghonga said these loans offer various collateral options, including assets, salary-backed repayment and contract financing, and have created 442 jobs.
“Our loan book is primarily dominated by men over 40, so this scheme aims to shift that balance. We have relaxed collateral requirements for this programme, offering options such as off-take agreements and salary-backed financing. This allows clients to secure loans based on agreements with market partners rather than traditional collateral,” Nanghonga said.
To further support its clients, Agribank collaborates with the Namibian Agronomic Board to connect farmers to markets and establish links with major off-takers such as retailers and farming associations.
Nanghonga emphasised the importance of collaboration in the sector, noting that, “by supporting organised groups of farmers, Agribank encourages teamwork and cross-sharing of resources, enabling smallholder farmers to succeed in a challenging sector.”
The bank’s focus on small and medium enterprises (SMEs) has also yielded positive results.
Agribank’s SME loan portfolio experienced significant growth in 2023, supporting organised groups and SMEs in agro-processing and milling.
Although the number of SME clients remains modest, the impact on employment is notable. Nanghonga detailed the achievements:
“We have 12 clients in SME loans and 11 in agro-processing. Despite these small numbers, these clients create significant employment opportunities, including 345 permanent jobs and around 920 temporary positions during peak seasons like harvesting,” she said.
The bank has also prioritised financial literacy and debt management to ensure the long-term sustainability of its clients’ businesses.
She noted collaborations with institutions like the Development Bank of Namibia provide farmers with access to essential skills, including bookkeeping and financial management.
“We continue to focus on financial literacy and debt management, especially for smallholder farmers. I also want to commend the Ministry of Agriculture for their invaluable support to the sector, including subsidies for poultry, fodder production, and other essential resources,” she said.
