By Hilary Mare
AGRIBANK has confirmed that it has recouped N$22 million from loan defaulters in the first month of its debt collection activities, which started on 14 February.
The bank is owed a whopping N$500 million in arrears, out of total loan book of N$2.4 billion.
The debt recovery process, which started on 14 February, was initially spearheaded by Red Force Debt Management, but Confidente can now reveal that the bank has also roped in another debt collector, United Africa Group, to recoup a further portion of the arrears.
Speaking to Confidente this week, Agribank Marketing and Communication Manager, Rino Muranda, said that amounts collected were increasing every day.
“The situation is positive and we are very optimistic. As you know, we only commenced with the first debt collector (Red Force) on 14 February, which means we are now just over two months into the initiative. We have noted a very positive response from our customers. Some of them have made down payments and others have put in place firm arrangements to pay off their arrears over periods that are practical for them, and reasonable and fair to the bank.
“In the first four weeks of this initiative – with Red Force on board – we have already recouped an excess of N$22 million,” Muranda said.
“This amount increases daily, as new repayment agreements are made with customers. We now also have the second debt collector on board (United Africa Group) and we have handed over a portion of the arrears book to them, to start interacting with clients. We are confident that we will see good repayment inflows in two to three months.”
Without giving away specific debt recovery targets for the current financial year, the bank bemoaned reports of those who have resisted paying their debts.
It said that those who are refusing to pay would prevent the bank from meeting its mandate to finance agriculture and its related activities, which had the aim of boosting the sector’s productive capacity, in the best interests of Namibia.
“The appointed debt collectors have performance targets, and so far we are not aware of any challenges, apart from some clients who are refusing to cooperate. If our clients do not repay their loans, this will severely impact our ability to fulfil our mandate, not just during the 2017/18 financial year, but also in future.
“We have picked up from social media platforms that some clients are refusing to make arrangements to pay their debts, while accusing Agribank of threatening to repossess their farms.
“We want to state once again that as a bank, we have not issued any threats to any of our clients, nor have we mandated anyone to do this on our behalf.
“Our intent is not to repossess farms or houses, but to have credible, practical, reasonable and fair repayment arrangements with clients, which they then honour. “Repossession of property is, in debt collection matters, a last step in the process, which should apply only if all other attempts fail. Hence, those clients refusing to heed the call, are doing it at their own risk, as we will not have an alternative but to call in the collateral or allow the process to reach its own logical conclusion,” the bank stated.
The bank has total arrears of just over N$500 million of the total loan book of N$2.4 billion, which represents an arrears-to-total advances ratio of 21 percent, while the benchmark ratio for development financing institutions is 15 percent.
“The sustained high levels of arrears will threaten Agribank’s financial sustainability and its ability to deliver on its mandate in the long-term,” Agribank Chief Executive Officer, Sakaria Nghikembua, told Confidente last month.
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