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Agribank delivers solid results… as total assets exceed N$3 billion

Agribank delivers solid results… as total assets exceed N$3 billion

Business Reporter

PREMIER agricultural lender, Agribank, recently announced a solid set of results for the year ending 31 March 2019. Speaking after the bank’s annual general meeting, chief executive officer Sakaria Nghikembua announced that despite the difficult operating environment, characterised by a severe drought and an economy in recession, the bank delivered a healthy set of results.

According to Nghikembua, Agribank’s loan book grew by 15% year on year, from N$2.4 billion in 2018 to N$2.8 billion in 2019.

The growth in the loan book came largely on the back of new business growth. Disbursements were 22% up on prior year, increasing from N$358 million in 2018 to N$438 million in 2019.

MONEY-SPINNING: chief executive officer Sakaria Nghikembua. Photo: contributed

As a result, interest income grew 14.5% from N$189 million in 2018 to N$216 million in 2019. Nghikembua further stated that provisions for bad debts on loan advances were well contained partly because of a steady hold on the collections rate and largely because of ensuring sufficient collateral cover for high-risk loan accounts. Expenses were well contained at a growth of 4.4%, whilst the bank’s surplus increased 87% from N$30 million in 2018 to N$56 million in 2019.

The Bank’s total assets grew by nearly 7% year on year, exceeding the N$3 billion mark for the first time in history.

Total assets stood at N$3.011 billion at the end of March 2019 compared to N$2.82 billion the year before.

Turning to key strategic actions during the year, Nghikembua stated that the bank opened an office branch in Gobabis in the Omaheke region as part of its strategy to be accessible to its customers.

The bank continued to roll out its salary-backed no-collateral product for communal farmers, disbursing N$26 million in new loans for this product during the year. Since launching in April 2017, the bank has disbursed a total of N$61 million in salary-backed no-collateral loans to communal farmers.

In addition, the bank also introduced a no-collateral loan product for full time communal farmers called emerging retail financing product (ERFP) in May 2018. A total of N$4.5 million was disbursed to communal farmers under this product during the financial year.

The introduction of the two no-collateral loan products makes it possible for communal farmers to access funding for agricultural purposes, with clients using the loans for livestock acquisition, water and electricity infrastructure, tractors and implements and fencing amongst other needs.

Through its lending activities, the bank created and/or maintained 46,816 direct jobs in the agriculture in 2019, compared to 45,232 jobs in 2018. By creating about a third of all jobs in the agricultural sector, the bank plays a very important role in income generation and poverty alleviation.

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