Agribank has cut ties with RedForce, a debt collecting company awarded rights to collect part of the N$500 million owed by farmers.
RedForce, which had attracted controversy over its debt collecting methods and its ownership, was awarded the tender over a year ago.
Although it was not clear why Agribank had opted out of the deal, there was speculation this week that political pressure had been applied on the bank to cancel the tender.
This comes two weeks after hundreds of Affirmative Action Loan Scheme farmers, who owe Agribank money, staged a protest outside the bank’s head office in Windhoek and the Ministry of Finance headquarters voicing their concerns over the decision by the lender to hand over their names to debt collectors, who they said were now harassing them.
Redforce Chief Executive Officer, Zimbabwean national Julius Nyamazana confirmed to the Windhoek Observer that his company had received a letter from Agribank CEO, Sakaria Nghikembua, dated 30 March, giving the company 30 days to wind up its debt collection services and hand over files to the bank after the agricultural lender decided not to renew its contract.
“We hope to finalise by 4 May,” Nyamazana said.
He claimed that from the 2000 accounts which were handed over to his company in February last year, RedForce had collected N$80 million out of a possible N$118 million debt.
“We have done our part, which is a 75 percent success rate. The letter did not give reasons why the agreement will not be renewed, but we did very well.”
He said Agribank clients who were not happy with their debt collection services had not made any arrangement to repay their debts.
“These are the ones who think they are not entitled to pay back the money,” he said.
Nyamazana said some of the defaulters had more than one account with Agribank.
“Some of them had used houses and farms as collateral.”
The status of another debt collecting company owned by the United Africa Group was not clear by the time of going to print.
“I don’t know anything; I am in the United States at the moment. If they have cancelled it, then they must give us the reasons,” United Africa Group Chairperson, Martha Namundjebo-Tilahun, said
Nghikembua told the Windhoek Observer that clients who have loans with the bank and are in arrears must make appropriate arrangements to repay such arrears.
“Collections will not stop. That’s the key message from the bank. We can only continue to emphasise the message that clients who are in arrears must individually approach the bank to make the necessary repayment arrangements,” he said.
On the cancellation of the debt collection tenders, Nghikembua said “if there ever was any communication from the bank’s side that is worth sharing with the media, it would reach you through the correct channels.”