STAFF WRITER
Agribank has started implementing the first phase of its Arrears Relief Programme effective from 2 February.
In a statement released on Friday,the bank’s Chief Executive Officer, Raphael Karuaihe said the programme, launched last year September, is aimed at assisting clients who have fallen behind on their loan repayments, while strengthening the Bank’s loan recovery efforts through an incentivised and supportive approach.
The bank said the application window will run for six months from 2 February until 31 August.
“The programme is open to all Agribank clients whose accounts are in pre-legal or legal status. Participating clients will benefit from a 100% write-off of penalty interest, subject to conditions,” he said.
Karuaihe said pre-legal clients are required to pay at least 20% of their arrear balance (loan installment and interest portion, excluding penalty interest), while legal clients must pay at least 25% of their arrear balance under the same terms.
He said additional benefits include de-listing from the credit bureau, where applicable, voluntary advisory services tailored to client needs, and, where suitable, opportunities for project publicity and marketing support.
“Once the required portion of the arrears is paid, the remaining arrear balance
will be ring-fenced, and no further interest will be charged on that amount. The ring-fenced balance may be repaid for a period of up to 60 months, through equal monthly, quarterly, or bi-annual installments,” Karuaihe said.
He added that clients will sign an addendum to the loan agreement to formalise the arrangement, and where legal actions have already been instituted, the repayment arrangement will be signed as an Order of Court.
“Clients must, however, continue to service all new and ongoing installments as they fall due. Failure to honour the agreed repayment arrangement will result in the reinstatement of penalty interest and continuation of recovery processes.
Defaulting on any other loan obligations may also lead to the revocation of relief benefits. Relief under this programme is granted once per client, unless otherwise revised,” he said.
Karuaihe said Agribank continues to cushion farmers against challenges such as drought through climate responsive financing products, provision of advisory services to improve productivity, and collaboration with Government and other stakeholders on relief measures as and when required.
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