Development Bank of Namibia (DBN) Head of Marketing and Corporate Communication, Jerome Mutumba, has clarified the Bank’s role and participation in agricultural finance, stressing that finance for direct agricultural investments is a mandate held by Agribank, but that Development Bank can provide finance for agri-enterprise.
Explaining DBN’s definition of direct agriculture, Mutumba says it entails finance for land and agricultural inputs.
However, agri-enterprise, he says consists of adding secondary value to agricultural operations, as well as resource transformation of agricultural produce. Development Bank will consider finance for agri-enterprise.
Mutumba goes on to split the Bank’s finance for agri-enterprise into three distinct fields.
Firstly, he says agri-industry is enterprise activity that manufactures products to support agriculture, such as fertilizers and feeds. This category might also include professional services to agriculture, such as veterinary services, welding and fabricating, and mechanical repairs, he continues, alluding to the Bank’s skills-based finance for young professionals and artisans.
Secondly, agri-processing consists of transforming and marketing the products of stock farming and horticulture, with finance for items such as mills, feedlots, abattoirs, dairies, processing facilities and transport and logistics assets.
Thirdly, he points to the Bank’s climate adaptation facility. Infrastructure financed under this facility might include solar power, water storage and water distribution for larger agricultural enterprises.
The Bank has a strong track-record in the field of agri-enterprise, including finance for abattoirs, feed lots, dairy production and milling plants. The Bank sees agri-enterprise as a growth area, Mutumba quips.
Talking about the Bank’s rationale for participation in the field of agri-enterprise, Mutumba says that Namibia has prioritised food security since its inception through manufacturing, as well as long-standing support to commodity level processing such as milling, for instance.
Mutumba says that with the supply chain crisis as well as current pressure on grain and oil used in food preparation, support to agri-enterprise is more important than ever before.
Given Namibia’s challenge to substitute grain and cooking oil production, it has become all the more important to find means to stimulate the production of local foodstuffs that can be used as nutritional substitutes for imported agricultural commodities.
Given the reported waste of approximately 45% of horticultural foodstuff due to a shortage of processing and packaging, he adds, finance for value adding through manufacturing, and transport and logistics can also enhance food security.
At the same time, he acknowledges the challenges faced by smaller farmers, but says the Bank advocates that networks of small famers establish companies, in which they are shareholders, to spread collateral and owner’s contribution requirements, as well as to ensure that consistent and sufficient supply of produce is available.
Mutumba goes on to say that with Agribank’s finance for direct agriculture, the Namibia Agronomic Board’s Market Share Promotion mechanism to drive local horticultural supply chains, and Development Bank’s finance for food manufacturing, the country has a strong basis for enhancing its own food security.
There is a sound institutional environment that supports agriculture.
If you are in the field of agri-processing, or any form of value addition to agricultural produce, and have a viable business plan, approach Development Bank to see how we can support your growth, Mutumba concludes.
In the photo: Development Bank of Namibia Head of Marketing and Corporate Communication, Jerome Mutumba.
