Time Is Tight for Agribank’s Four Drought Relief Products

Time is running out for Namibian farmers who are battling financially to overcome the challenges of last year’s drought to apply for the four drought relief products developed by Agribank to mitigate the effects of the drought. The closing date to apply for these drought relief products is March 31.

The first of the four drought relief products is a production loan facility of which the purpose is to enable communal, resettled and commercial farmers to cover day-by-day cost on production inputs such as seeds, fertilisers, herbicides, pesticides, fuel and oil cost, wages, lease of grazing, licks and veterinary medicines. This facility will be offered at a reduced rate of four percent for commercial farmers, and two percent for communal and resettled farmers over a period of six years. The first year will be capitalised and the remaining balance will be amortised for five years. Clients that were in arrears with repayments on December 31, 2013, must pay 25% of their arrears upfront to qualify for this facility.

The second relief measure is a water and infrastructure facility that will enable farmers to upgrade water and other infrastructure to sustain the farm through the drought crisis. The facility is offered to severely affected farmers at interest rate of four percent for commercial farmers and two percent for communal and resettled farmers for a loan term of 15 years. A ring fencing of arrears and suspension of penalty interest facility was developed for all clients in arrears as of December 31, 2013. Such clients will be given an amnesty period of five years in which arrears shall be ring fenced. The clients will have to apply for this facility and pay 25% of their total arrears amount upfront and the balance shall be ring fenced for five years to be paid in five equal instalments. To ensure client affordability, the penalty interest on arrears will be suspended. Clients currently already at legal department will not qualify for this facility, and the bank will take drastic steps towards clients who will default under this facility.

The instalment holiday period of one year facility is offered to Agribank clients whose instalments became due from January to December 2013. Such instalments would be deferred to the end of the loan period, thus extending the loan period by one year. For instance, a loan period of ten years for livestock would be extended to 11 years at applicable rates. Clients not in arrears by January 1, 2013 will qualify for this facility while clients in arrears will be required to pay 25% upfront of the arrears’ balance to qualify for this facility.

Source : New Era