Farmers keen on AALS
01 April 2020 | Agriculture
There has been a marked interest from farmers, particularly from previously disadvantaged backgrounds, regarding the Affirmative Action Loan Scheme (AALS).
Agribank's manager for marketing and communication, Rino Muranda, said the scheme was established in 1992 through a Cabinet resolution.
According to him, Agribank was appointed to administer the implementation of the scheme, with the objective to provide affordable financial resources to well-established previously disadvantaged Namibians to acquire land in commercial areas south of the veterinary cordon fence (VCF).
Muranda said the scheme is therefore an instrument for equitable land distribution for sustained growth.
“It is tailored to resettle the more established and strong communal farmers in commercial areas. Loans are granted against security of the mortgage bond and repayable over a period of 25 years.”
To benefit, applicants are required to own a minimum of 150 large stock or 800 small stock or have the financial capacity to purchase the abovementioned stock numbers, Muranda added.
He said to fast-track the acquisition of farmland, government provides interest rate subsidies to enable well-established emerging farmers in communal areas to obtain loans to meet the rising prices of farmland that they otherwise would not have secured.
He said the modus operandi of the scheme has not changed, although the agriculture ministry, in line with resolutions taken at the country's second land conference, is spearheading consultations with key stakeholders, including Agribank.
Muranda said this is to review the scheme to make it more relevant, responsive and practical to the dynamics of today's market.
According to him, full-time farmers under the scheme are granted a three-year grace period after disbursement, before the repayment of both the capital and interest from year four onwards.
“The outstanding amount is redeemed over the remaining 22 years at an incremental interest rate.”
He said with regard to part-time farmers under the scheme, there is no extended grace period on capital repayments, as the first annual instalment is due after six months.
However, beneficiaries may apply for an option to capitalise the interest portion of the capital amount during the first three years, depending on the annual non-farming income category.