Bank of Namibia grants farmers loan holidays
Commercial banks must offer up to 24-month repayment breaks to farmers and businesses hit by disease and drought.
The Bank of Namibia directed commercial banks on Friday to provide loan repayment moratoriums of up to 24 months for farmers and businesses affected by Foot-and-Mouth Disease and anticipated El Niño conditions. Banking institutions must assess borrowers' financial circumstances and income losses before granting relief, which can range from one to 24 months. Banks may also restructure loans to make repayments more manageable, though interest will continue to accrue unless otherwise agreed in writing.
This intervention follows concerns raised by the agricultural and banking sectors about financially distressed farmers and businesses. Eligibility extends to companies within the agricultural value chain whose income depends on farming. Borrowers must demonstrate that their income has been adversely affected by the disease outbreak or climatic conditions. The central bank also introduced protections for credit bureau reporting, requiring banks to report clients receiving relief as performing.
The Bank of Namibia stated the measure aims to support the agricultural sector's viability, protect livelihoods, and limit financial system risks. Agriculture is a significant contributor to employment, food security, and economic growth. The FMD outbreak and adverse climatic conditions pose risks across the agricultural value chain. Banks must provide written reasons for declining applications, and borrowers can lodge complaints through internal processes.