BNI pledges Rp 25 billion loan for fish farmers

Sari P. Setiogi, The Jakarta Post, Jakarta

Publicly listed, state-owned bank BNI has pledged to allocate Rp 25 billion (US$2.78 million) in loans to small and medium- sized fish farming businesses this year to boost their welfare and the nation's fishing industry.

The bank made the pledge on Friday to the Ministry of Maritime Affairs and Fisheries.

"We are negotiating the interest rate," ministry director general of institution and marketing capacity enhancement Sumpeno Putro told The Jakarta Post, adding that the disbursement of the loan was expected to start by the end of the first quarter of the year.

According to him, interest rate on bank loans for small and medium enterprises (SMEs) now ranges from 6 percent to 12 percent.

"We want to push the interest rate to the minimum level of 6 percent," said Sumpeno.

A maximum of Rp 5 million will be available for small enterprises or individuals, while medium-sized enterprises may obtain Rp 50 million at most.

As most small fish farmers do not have property to present as collateral for the loans, BNI will ease the procedure for them to obtain them. They need only to show a letter of recommendation from the ministry's local office or present their marriage documents.

"In the first phase, we shall target several locations, such as North Sumatra, West Sumatra and South East Sulawesi," he said.

Separately, vice chairman of the Association of Indonesian Fishing Companies (Gappindo) Johannes Kitono explained that the country's small and medium-sized fishing companies, particularly shrimp companies, were not well developed due to a lack of funds.

Most banks declined to provide them with loans because they operated in a traditional way.

According to him, 80 percent of the nation's shrimp companies, which employ about 10 million people, are categorized as small and medium-sized companies.

Johannes, who is also the chairman of the Indonesian Shrimp Food Producer Association (APPUI), said total Indonesian shrimp exports were estimated at about 150,000 metric tons last year.

About 50 percent of exports went to Japan, 20 percent to the U.S. and 15 percent to European Union countries.