WINDHOEK: The Agricultural Bank of Namibia (Agribank) and Germany’s Kreditanstalt fr Wiederaufbau (KfW) Development Bank on Thursday entered into a historic agreement, signing a first concessional loan of over N.dollars 400 million.

Agribank and KfW in a joint statement said the collaboration aims to empower farmers operating in both communal and commercial areas, as well as other agricultural or food-processing micro, small and medium enterprises in Namibia.

‘Agribank will on-lend the funds for the target group of small-scale farmers as well as the MSMEs in primary agriculture and agro-processing. With access to need-based financial products, the target group is empowered to use funds to expand and develop their agriculture or food processing activities, thereby generating additional income and increasing food production and income in Namibia,’ the statement read.

The project promotes the establishment of productive and resource-conserving agriculture for sustainability reasons.

After signing the loan ag
reement, Agribank and the National Planning Commission and KfW Development Bank also signed a grant agreement of just over N.dollars 20 million in Agribank’s favour, the joint statement said.

During the signing ceremony, Head of Development Cooperation at the German Embassy, Ulrike Metzger said it is known that there is a lack of access to credit financing in rural areas, especially for young farmers, women and farmers on communal land.

She noted that this prevents necessary investments to increase productivity and secure income for rural families.

‘Commercial banks can only grant loans with land titles as collateral, which cannot be presented on communal land,’ Metzger added.

Simultaneously, Agribank CEO Raphael Karuaihe said the day marks a momentous occasion – the signing ceremony of a crucial loan agreement that symbolises a significant chapter in the bank’s commitment to sustainable and long term funding for its lending activities.

‘Our vision is to contribute not only to the financial wellbeing of
our clients but also to the broader goal of environmentally conscious and sustainable practices in the agricultural sector,’ Karuaihe noted.
Source: Namibia Press Agency (NAMPA)