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July 08, 2008

Top Namibian officials in loan arrears to agricultural bank

Namibia's Anti-Corruption Commission (ACC) has formally requested the Agricultural Bank of ibia (Agribank) to provide information on the affirmative action loan scheme at the bank.

This comes after a number of high-profile debtors failed to pay their dues on the loans they took out with the bank, including Agribank Chief Executive Officer Leonard Iipumbu.

The ACC’s probe was prompted by arrears of nearly half-a-million dollars apparently owned by the bank’s CEO. Iipumbu is said to owe the bank a N$460 675. (US$60,000) Earlier this month, Agribank issued a notice to its head to settle the amount.

There has been public outcry since the discovery of the debt owed by senior government officials including the bank CEO. Calls for the resignation of Iipumbu were widespread with the Namibia Financial Union (Nafinu) asking for the axing of the CEO.

“This is shocking because poor people struggling to make a decent living from the little that they have, are the primary focus of the so-called recovery process at the bank, while the big fish are let free or off the hook.”

The organisation said the bank has failed to fulfil its mandate as a “sustainable financial services institution” that adds value to agriculture and related industries, saying that the bank’s role was “questionable” due to the “huge arrears” on affirmative action loans.

“This seriously hampers development and on-lending to other more needy communal farmers and by default the defaulters are denying the poor farmers a right to access credit,” Asnath Zamuee, General Secretary of Nafinu said, adding that the values the bank purports to uphold are “heavily compromised by individuals serving their own interests only”.

However, Iipumbu was quoted earlier as saying he is indebted to the bank as a person and not because he is the CEO.

“I do not own the farm because I am the CEO of Agribank,” countered Iipumbu, saying that the bank has all the right to take steps against him if he does not honour his loan commitments. The arrears on his loan, he said, were due to developments on his farm. Iipumbu said that since his take-over at Agribank, recovery on loans has improved dramatically, with monthly recoveries now in the region of N$25 million, as opposed to the previous N$4 million to N$7 million recoveries per month”.

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