Bank of Namibia eases farmers’ debt burden
By the AFREEQUE newsroom, based on New Era
Illustrative image · Quang Nguyen Vinh · Pexels · Licence PexelsThe Bank of Namibia is requiring commercial banks to offer repayment deferrals, loan restructuring and expanded credit to struggling farmers. Directive BID-42 aims to limit the economic impact of foot-and-mouth disease and El Niño-related climate conditions on Namibian agriculture, New Era reports.
The Bank of Namibia adopted the BID-42 directive on Friday, requiring commercial banks to offer support measures to farmers affected by foot-and-mouth disease outbreaks and climate risks linked to the El Niño phenomenon. The central bank wants to safeguard rural farms and limit the effects of these crises on financial stability, according to Namibian daily New Era.
Eligible farmers and agricultural businesses will be able to obtain a repayment deferral on their loans lasting between one and 24 months. Banks will also be able to reschedule the maturities and terms of existing loans, as well as provide new financing to operators with a viable risk profile and repayment capacity, according to the BID-42 directive.
The measure temporarily relaxes banking rules so that institutions can support struggling borrowers without automatically triggering a technical default. It comes as foot-and-mouth disease is already disrupting Namibia’s agricultural economy, following measures to assess health controls taken after an outbreak of the disease.
