Explainer: How the Bank of Namibia’s 24-month relief package will support farmers and agricultural businesses

The Bank of Namibia has introduced a 24-month regulatory relief framework to help farmers and businesses in the agricultural value chain affected by the Foot-and-Mouth Disease (FMD) outbreak and El Niño-induced drought conditions.

The measures, issued under Determination BID-42, are intended to ease pressure on borrowers facing reduced income, cash flow constraints and difficulties meeting loan repayments.

The framework requires commercial banks to provide eligible borrowers with options to restructure existing debt, defer repayments and access recovery financing.

1. What is the 24-month repayment holiday?

Commercial banks may grant eligible agricultural borrowers a repayment holiday of up to 24 months on the principal portion of performing loans.

This applies to working capital loans, term loans and equipment financing held by eligible borrowers as at 22 September 2026.

The repayment holiday is intended to give affected businesses time to recover from lost income without having to meet their normal principal repayment obligations during the approved period.

However, the relief is not an automatic cancellation of debt. Borrowers remain responsible for their outstanding obligations, subject to the revised repayment arrangements agreed with their banks.

2. Will banks charge additional fees for granting relief?

Banks are prohibited from imposing penalty interest, default fees or additional administrative charges solely because a borrower has been granted a repayment holiday.

Under the framework’s burden-sharing principle, banks must also document how the restructuring ensures that borrowers are not placed in a worse financial position in terms of interest rates and the overall cost of credit compared with their position before the financial distress.

This is intended to prevent borrowers from accumulating additional financial penalties simply because they need temporary repayment relief.

3. What happens to borrowers who are already struggling to repay loans?

The determination also provides for distressed loan restructuring for borrowers already experiencing repayment difficulties.

Banks may restructure existing facilities by extending repayment periods, reducing interest rates or converting short-term debt into longer-term financing arrangements.

The aim is to make repayments more manageable in line with the borrower’s reduced income and expected recovery period.

Banks may also provide new Agricultural Recovery Financing facilities under preferential and concessional terms to support affected businesses as they resume or rebuild operations.

4. Will borrowers be blacklisted by credit bureaus?

No. Borrowers granted relief under the framework must continue to be reported as performing to credit bureaus.

Banks may not classify these borrowers as non-performing or in arrears simply because their repayments have been deferred under an approved repayment holiday.

This provision is intended to protect the credit records of borrowers receiving regulatory relief and prevent them from losing access to future financing because of an approved restructuring arrangement.

5. Who qualifies for the relief?

The framework covers more than livestock and crop farmers. It extends to businesses across the agricultural value chain that can demonstrate that their income has been significantly affected by the FMD outbreak or El Niño-induced drought conditions.

Eligible categories include:

Primary producers: Livestock, crop, game and wildlife farmers.

Agricultural businesses: Abattoirs, auctioneers, meat processors, feed suppliers, agricultural input providers and veterinary service providers.

Transport and logistics: Agricultural transporters, logistics companies and vehicle and trailer repair businesses.

Tourism operators: Agricultural tourism businesses affected by the crisis.

Businesses must formally apply to their commercial banks and demonstrate the impact of the disease outbreak or drought on their income.

6. Does the relief apply automatically?

No. Eligible borrowers must approach their banks and apply for assistance.

Banks will assess applications and determine appropriate relief measures based on the borrower’s circumstances and the applicable requirements of the determination.

The framework provides banks with flexibility to use repayment holidays, loan restructuring and recovery financing to address different types of financial distress.

7. Why has the Bank of Namibia increased the Single Borrower Limit?

The central bank has temporarily increased the Single Borrower Limit from 25% to 30% of a bank’s capital funds.

The limit determines the maximum credit exposure a bank may have to a single borrower or related group of borrowers.

Increasing it gives commercial banks additional capacity to extend larger credit facilities to agricultural businesses affected by the drought and FMD crisis.

This is intended to ensure that lending restrictions do not unnecessarily limit banks’ ability to support borrowers requiring substantial restructuring or recovery financing.

8. How long will the measures remain in place?

Determination BID-42 will remain in effect for 24 months from its publication date, subject to regular reviews by the Bank of Namibia.

The central bank will monitor developments in the agricultural sector and the progress of recovery efforts.

Commercial banks must also submit monthly reports detailing the distribution of relief, repayment performance and estimated jobs saved through the interventions.

The reporting requirements will allow the central bank to monitor how the measures are being implemented and their reach across the agricultural sector.

9. What does this mean for farmers and businesses?

The relief package provides affected farmers and agricultural businesses with additional time to manage their debt while dealing with reduced income caused by drought and animal disease restrictions.