Agribank has suspended new salary-backed loans for government employees after the Ministry of Finance (MoF) announced the termination of services with Avril Payment Solutions (APS).
Agribank Chief Executive Officer Raphael Karuaihe said the suspension takes effect immediately.
“Following the announcement by the Ministry of Finance regarding the termination of services with Avril Payment Solutions (APS), no new personal loans for government employees will be processed through the APS platform. As a result, Agribank has placed an immediate moratorium on its salary-backed loan facility for government employees,” he said.
Karuaihe confirmed that existing loans will not be affected. “Existing loans remain unaffected and will continue to be administered by the MoF until they are fully settled,” he said.
He explained that the Salary-Backed Loan scheme was introduced to improve access to finance for farmers without collateral.
“The Salary-Backed Loan scheme was introduced to enhance financial inclusion for farmers without collateral and to promote agricultural activities in both communal and commercial areas. It caters to salaried part-time commercial and communal farmers, as well as agribusiness ventures, by providing access to finance with repayments effected through payroll deduction,” Karuaihe said.
The CEO added that Agribank’s broader mandate remains unchanged.
“Agribank remains committed to offering innovative, tailor-made financial solutions at competitive rates to meet funding needs of the diverse segment of the agriculture sector and its related value chains,” he said.
The move follows a similar decision by Letshego Holdings Namibia, which has also suspended new Deduction at Source (DAS) loans for government employees.
Letshego said that, with immediate effect, all new micro-lending loans will be issued through debit order arrangements and subject to credit affordability assessments.
