More articles in this category
Top Stories

The RCC board chairperson Fritz Jacobs has told The Villager that he welcomes the Cabinet Committee on Overall Policy and Priorities’ (CCOPP...

The Ovaherero paramount chief, Vekuii Rukoro has proposed that the recently discovered Ovaherero and Nama human remains should be kept in the Unit...

The Oshakati Town Council in partnership with Oshakati Premier Electric (OPE) has launched a pilot phase of national support tariff mechanism with...

Analysts have voiced their concern over the latest move to place the Roads Contractor Company (RCC) under administrative management saying that wh...

  Michael Gaweseb, a NamWater director, has written to the board urging them to discipline the Chief Executive Officer Dr Vaino Shivute ov...

Namibia Equity Brokers (NEB) analyst Ngoni Bopoto has said GRN is well on course in its efforts to bring down debt to manageable levels judging by...

Other Articles from The Villager

Farmers unhappy with AgribankÔÇÖs debt collection, and debt collector

Fri, 19 May 2017 18:09
by Linekela Halwoodi
News Flash

Some farmers, who claim that the Agribank chief executive did not follow the procedures when he hired debt collectors that include Redforce Debt Management, have written to the President’s Office and the finance minister seeking an audience over their debts.

Agribank embarked on a massive debt collection in a bid to recover more than N$500 million, which the chief executive officer Sakaria Nghikembua said has been outstanding for as long as 10 years. The bank flighted an advertisement asking debt collectors to express interest in October 2016. The advertisement that ran for 10 days closed on 21 October, while the debt collection tender winners - Redforce Debt Management and United Africa Group were announced in January this year.

The farmers have also written to the agriculture minister John Mutorwa; the land reform minister Utoni Nujoma; finance minister Calle Schlettwein; and the Agribank board regarding the same issue. In their letter to Nghikembua on 9 March 2017, the farmers asked for a meeting but he replied on 11 April 2017 informing them that he can only meet them individually.

They also expressed concern with the way the bank had gone about the issue of collecting debt without engaging them as stakeholders. “We, as clients of the Bank, have been following media reports on the bank’s developments with keen interest. We are of the view that we were not consulted on the approach which the bank has adopted.

“By outsourcing the debt recovery function, the bank places us as farmers in a very precarious position. The drought of the past three years has placed a tremendous strain and limitations on the farmers’ abilities to timeously repay the loans.

“We are, therefore, of the view that a balance must be struck to ensure the sustainability of the bank and the survival of the farmers. It is against this background that we, the undersigned farmers, request an audience with your office and the board of directors,” the farmers said in the letter. In his response, Nghikembua said the debt collection strategy is integral to the Bank’s fi ve-year strategic plan whose primary objective is to ensure financial sustainability.

“It is a board approved strategy that has been fully shared with and sanctioned by the shareholder. Financial sustainability will enable the bank to fulfil its mandate of reaching out to a Farmers unhappy with Agribank’s debt collection, and debt collector wider Namibian base. “Every one of our clients faces different circumstances with regard to their loan accounts. Each client who has been handed over to debt collectors thus needs to individually engage with the debt collectors to make practical, fair and reasonable repayment arrangements,” Nghikembua said in his response.

After failing to meet Nghikembua, the farmers then wrote to the President’s Office on 26 April, saying that they had wanted to meet the Agribank chief executive officer to discuss “urgent and burning issues that have adversely impacted heavily on the existence and sustainability of our current and future farming operations, for both the communal and commercial sectors alike”.

“We took note of the CEO’s argument that Agribank will deal individually with the farmers but we beg to disagree because we believe all problems are common and that a lasting solution can only be found through collective action. “It is thus our humble plea that the Board of Directors of Agribank should adopt a different approach and agree to meet the farmers as a collective, considering that the farmers are the most important stakeholders of Agribank.

“For the record, we are encouraging the farmers to settle their arrears. However, there are serious obstacles in this regard, and we would like to bring these to your kind attention” the letter addressed to the President’s Office said. This week, Nghikembua said that he finds it very interesting and unusual for Agribank to consult clients who are in arrears before they have either developed a collections strategy or implemented it.

“All I can say is that I am yet to see any institution that must first consult a defaulting client on whether or not to collect; and how to collect. “In the final analysis, I wish to reiterate that Agribank remains ready to listen to each of our clients, either directly or via the appointed debt collectors, and to craft mutually agreeable repayment plans with them. Those who have already made use of this opportunity know this is true,” he said.

NO RESPONSE YET

Although none has yet responded to the farmers, in March Nghikembua told the Namibia Emerging Commercial Farmers Union and the Namibia Agricultural Union during an engagement session that the debt collectors had secured more than N$20 million. “This amount increases daily as new repayment agreements are made. We now also have on board the second debt collector and are busy handing over a portion of the arrears book to them before they start interacting with clients. We are confident that we will see good repayment inflows in two to three months,” Nghikembua told the unions.

At the same session, Nghikembua warned those farmers who were resisting the bank’s debt collection efforts. “The clients who are ignoring or refusing to cooperate with the duly appointed debt collectors are doing it at their own risk. These agents have been appointed and are acting fully on behalf of the Bank.

“We are fully aware that clients will not necessarily be able to repay all their arrears at once, nor do we expect them to. What we do expect is that suitable arrangements should be made to settle the debts over a reasonable period of time,” Nghikembua said.

In a press statement he released on 5 May 2017, Nghikembua assured the Namibia National Farmers Union during stakeholder engagement session on the bank’s five-year strategic plan that the bank is ready to listen to individual clients who are prepared to engage it in order to make arrangements to repay their debts. The session also sought to share with the union the key milestones achieved by the bank over the past nine months and its focus for the future. Nghikembua said the bank has always been ready and continues to listen to numerous clients who visit Agribank on a daily basis to discuss their challenges with a view to enter into credible, fair and practical arrangements to settle their outstanding arrears.

“Every client has a unique situation and we cannot, as a bank, discuss individual clients’ situations in a group. We are glad that a number of our clients have already visited our offices or those of our appointed debt collectors, in this regard.

“We have a responsibility to ensure that the bank is fi nancially sustainable and the debt collections initiative is just but one initiative that the bank is implementing in pursuit of the fi nancial sustainability objective,” he said in the statement. The press release said that one of the union’s board member, who is also the Aminuis constituency councillor, Peter Kazongominja lauded Agribank’s debt collection method.

Kazongominja admitted that some farmers, who are battling with the effects of drought and low livestock levels, have adopted an antagonistic attitude towards the bank. “I can assure you that my message to our members will be to urge them to visit Agribank offices as individual clients to make suitable arrangements since clients are individually liable to settle their outstanding debts,” Kazongominja is quoted saying.

The statement further said that the union’s executive director, Mwilima Mushokabanji, said lack of information by communal farmers sometimes leads to anger and frustrations, but that once the relevant information is shared, they will understand and appreciate the context of decisions affecting them.

UNORTHODOX METHODS

One of the farmers, who visited The Villager, also expressed concern with dealing with a debt collection company, Redforce Debt Management, whose ownership is questionable. “Just last month we saw what was happening at SME Bank. Now we get information that the debt collection company is owned by a Zimbabwean national. I was one of those farmers who applied for a loan at SME Bank but I did not get. We just want to sit around the table and talk,” the farmer who spoke on condition of anonymity said.

Nghikembua, however, said he was not aware of any unorthodox methods being used by Redforce and that they do not have a mandate to use any unorthodox methods. “I assume unorthodox to mean unethical? It would be helpful to me and the Bank to get specific cases and details from any client who has been subjected to these unorthodox methods so that we can deal with those situations firmly and correctly.

“It remains difficult to act on general allegations made via the media. I would like to invite any of our clients with specific details to please contact me so that we can deal with any unorthodox situation”, Nghikembua said in an email. According to Nghikembua, they awarded the tender procedurally and transparently.

“I have comprehensively shared this process via the print media again recently in my letter and have repeated that to you. “The fact is that even if I knew any of the owners of the successful debt collectors – whether of Redforce or United Africa – that does not mean I am affiliated to them.

“I want to repeat my challenge – can those people making malicious allegations please go directly to the relevant authorities to submit the details? They shouldn’t try and dirtify my name just because they refuse to make any payment arrangements with the Bank,” Nghikembua further said in the email. The farmers also said they were concerned that Nghikembua could give such a big tender after advertising it for 10 days. They also asked how Nghikembua could go ahead with plans to hire debt collectors three months after assuming offi ce and without meeting stakeholders.

The farmers further said that Nghikembua did not give himself time to study the challenges the farmers are facing before handing over a tender to Redforce Debt Management. One farmer showed The Villager his correspondence with Redforce Debt Management that shows discrepancies between the amount the debt collector was demanding and the actual loan owed. The Redforce Debt Management loan was inflated.

The farmers also said that Agribank staff asked them to settle their arrears with the debt collection company, which has added 8% interest on top of the total owed. George Itembu, who claims to be the sole owner of Redforce Debt Management, however, said if there are any farmers making such claims, they should provide proof. “If there is any farmer who is alleging this, please let them provide proof. We can deal with that. All our calls are recorded and SMS’ are stored in our specialised software,” Itembu said, adding that they also do not repossess farms.

Although Itembu said all the payments are made directly to Agribank, some of the farmers told The Villager that Redforce Debt Management demanded that they should into the debt collector’s account.

WE WANT TO PAY BUT…

The farmers said they are willing to pay but the current situation of drought and floods do not allow them to. “It is not like we are refusing to pay, we never said that we are not going to pay. They have just predicted another El Niño. So where are we? We are still in the drought season,” another farmer said. The farmers said Nghikembua does not know anything about farming and that President Hage Geingob should look into how such people are appointed.

“He doesn’t farm. He doesn’t have farming experience. You get people who sit on their farmers and make a living off their farms and these are the people you are trying to kill,” they said.

“Some of these people don’t read the signs of time. While you have a sensitive thing like land, you are still fiddling with this nonsense. People are unhappy already. The entire government is already under pressure so are you helping or contributing to the crises. At least hear us out,” the farmers further said. The former Agribank chief executive offi cer, Ambassador Leonard Ipumbu, they said, used to invite farmers into the board room for consultations.

“Why can Sakaria not do the same? Now he says it is the board’s decision, but the board acts on recommendation. If he does not want to run the institution right he must leave the office,” they said. Nghikembua told The Villager that a number of stakeholders including farmers’ unions were invited when they released the strategic plan and shared with them. The debt, he also said, is not from last year and that there are clients who have not been paying for many years resulting in the huge amount. “Half a billion is not small number,” Nghikembua told The Villager, adding that when you are in the business of lending money, you need source in order to lend out.

“If you only give and you do not get it back you will die as a bank. We are there to make sure that these farmers have access to relatively cheap financing. If you do not get that money back you have a problem,” he explained. “It is very important that when you lend money you get it back and that is the collection strategy that we embarked upon. “Some of this debt is old - five, seven, 10 years. I wonder what the argument is for someone who owes 10 years’, so is it still from the drought of last year?

“We have a challenge in this country where people think if it is a loan from a state-owned enterprise you do not have to pay it back but you are denying another person an opportunity to benefit from financing.” Nghikembua said at any one point in time, a person will always have arrears but these must be at a manageable level. He said financial institutions maintain a debt management benchmark of 15% yet Agribank currently is at 21%.

“That is why it is necessary for us to collect the money. We do not have a free source of funding. You can get transfers from our shareholder, government when they give us money annually,” he said. Government, Nghikembua said, has its own challenges at the moment with regard to the fiscal situation and there has been a reduction in the amounts of transfers to state-owned enterprises.

“Agribank is one of them. The last financial year that ended in March we got zero that means we have to depend on ourselves,” he said.

According to Nghikembua, Agribank received just N$30 million for the 2017/18 financial year. Nghikembua said the N$30 million can be disbursed in one month and you are done. “N$30 million is roughly three to three and half farms these days. That is what you can lend to three people to get farms roughly 3 000 hectares and some livestock. That is very far from what our mandate should be. We cannot lend to three farmers the whole year and say we are okay to stay here,” he said.

WHO OWNS REDFORCE?

The farmers also said they suspected that the tender was not awarded procedurally, with some claims linking Nghikembua to Redforce Debt Management. Nghikembua dismissed these claims, saying that he is in no way affi liated to the company neither does he have any friendship with its owners.

“I do not do corrupt deals. So why would I go out of my way to manipulate the process to deliver a service provider of someone I know or is affiliated to me or a friend. The only thing I have is my name and integrity. I do not do deals,” Nghikembua said. “I have no affiliation, no friendship, no association no ownership or arrangement with anyone that is involved in Redforce. I even read a claim in an SMS saying that my wife works with the co-owner of Redforce.

“Are people so desperate to make allegations that are quite malicious? My wife does not even know who Redforce is. My wife has not even worked for the last two and a half years. What is implied by someone making that allegation?” he asked. A few weeks ago, The Villager revealed that Julius Nyamazana, who founded Redforce Debt Management in 2014, has a court record in Bulawayo, Zimbabwe, where he appeared on allegations of defrauding Edgar’s US$30, 000.

The Villager has obtained company registration documents that show that Nyamazana registered the company as a CC in July 2014 as a 100% shareholder. In September 2014, Nyamazana sold 51% of his shares to Nguvitjita Zatjirua but in January 2015, she sold her shares to the late former Electricity Control Board chief executive officer, Siseho Simasiku.

A recent ownership document dated 21 October 2016, shows that the 51% shares which were previously owned by the Late Simasiku were transferred back to Zatjirua. Itembu’s name does not appear in any of the amended forms and this was also confirmed by Nghikembua. Nghikembua, who worked with Itembu at NamPost, also confirmed that Itembu’s name does not appear on the Redforce Debt Management company papers submitted with the bank.

“I even have the cc documentation that was submitted, I do not see an Itembu. We appointed a company as it is. With very clear documentation submitted.

“Do not involve me or Agribank in an ownership issue that is not linked to any of the documentation we have for Redforce. “There were two people who were here when we did the presentation that was the MD of Redforce, Julius [Nyamazana] and a lady. Be that as it may, Itembu insisted he owns the company and also insisted that The Villager should provide proof of Nyamazana’s court record.

“Those are allegations. Ownership details of any private company are private in nature. We are a Namibian company,” he said. Itembu denied the claims that his company got the tender through corrupt means and that the ownership of the company is a private matter which he does not have to reveal. He would not, however, divulge any information regarding when he acquired the business from the initial owner. Simasiku’s family said they would only comment after they have all the information.

“At the moment there is nothing much that I can say now until I have all the information,” his widow Renette Simasiku said. When The Villager contacted, Zatjirua, who is employed at NIPAM’s finance department she asked to speak in person on that matter surrounding Redforce and would not confirm her ownership in the business on the phone.