Nedbank Reviews FMD Loan Relief For Farmers

Nedbank Namibia says is reviewing its internal processes to implement the Bank of Namibia's new agricultural loan-relief determination, as farmers and agricultural businesses face financial pressure from foot-and-mouth disease (FMD) and El Niño-related climatic conditions.

The determination, BID-42, provides a framework for banks to assist borrowers in the agricultural sector who have been adversely affected by the two disruptions.

Speaking to Business Pulse 360°, Nedbank welcomed the determination, saying it was aligning its internal processes with the new requirements.

"As the determination has only recently come into effect, Nedbank is currently reviewing its implementation requirements and aligning internal processes accordingly," the bank said.

The bank said assistance would not be automatic, as applications would be assessed individually based on the impact experienced by clients and their ability to meet their financial obligations over the long term.

"As with any credit-related intervention, support measures will be considered on a case-by-case basis, taking into account each client's individual circumstances, the impact experienced, and their ability to sustainably meet their obligations over the long term," Nedbank said.

Under the framework, affected borrowers may qualify for repayment moratoriums, restructuring of existing loan facilities or other appropriate support measures.

However, Nedbank said clients seeking assistance would need to engage with the bank and provide relevant information demonstrating how their farming operations or agricultural businesses had been affected.

The development comes as FMD-related movement restrictions and livestock disruptions threaten income across the agricultural value chain, affecting farmers' ability to sell livestock and generate cash flow to service existing debt.

For agricultural businesses, prolonged disruptions can also place pressure on operating costs, repayment schedules and the ability to maintain production.

Nedbank said its approach would be guided by its previous experience in supporting financially distressed clients during periods of economic hardship.

"During the Covid-19 pandemic, the bank provided payment holidays and tailored repayment solutions to qualifying individuals and businesses experiencing financial distress," it said.

The bank added that the same principles of responsible lending and client-centred support would guide its approach under BID-42.

Affected clients have been encouraged to contact their relationship managers or visit their nearest Nedbank branch to discuss their circumstances and the assistance that may be available.