The repayment rates of loans for communal farmers from the Agricultural Bank of Namibia (Oshakati Branch)

Abstract

The project aims to assess the repayment rates of loans for communal farmers from the Agricultural Bank of Namibia. The bank aims to increase the capacity of small scale farmers to produce marketable surpluses; to enable deficit farmers to become surplus producers and to enable the subsistence producers to increase the production of foodstuffs they would otherwise have had to purchase. The bank has package of four types of loans which are for: crop production , livestock, infrastructure and machinery

The project was carried out at Oshakati Branch. A case study comprising of twelve farmers were made. Borrowers interviewed were from different districts in Omusati region. The most serious problem experienced in collecting the data was the difficulties of finding the people who received loans from the Bank, as the Bank views the business with clients as confidential. The results of the investigations indicate that of the twelve respondents, only four are getting an income from their enterprise for which they borrowed money. The others are subsistence producers who are using their salaries to pay back their loans. The results further show that all loan beneficiaries are paying back their loans on time every month, except one farmer who experienced financial problems after his partner passed away

It was also found that loans were negotiated for livestock, fencing and milling machines loans for fencing material are highly in demand. Other types of loans like for inputs such as seed, fertilizer, and farming machines like tractors, cultivators or irrigation equipment are not in demand among the communal farmers although (these are the most important farming expenses)

It is therefore recommended that farmers in the Omusati Region should apply for other types of loans as well. Further more must the head office of Agribank be requested to provide required information to students in future that may help them to look at the situation of loan holders in various parts of the country