Indonesian Minister Hopes to Hook Loans For Fishermen

The Jakarta Globe, Arti Ekawati & Ardian Wibosono

A fisherman repairing a net at Cilincing, North Jakarta. Fishermen make just Rp 900,000 a month on average and find it hard to get bank loans. (Photo: Afriadi Hikmal, JG)

Minister of Maritime Affairs and Fisheries Fadel Muhammad wants to see the fisheries sector receive at least 20 percent of the funds earmarked by the government as part of a soft-loans scheme to promote the development of micro- and small businesses.

“Of a total of Rp 20 trillion [$2.1 billion] allocated by the government to finance the small-business loan scheme, I hope to secure some 20 to 25 percent of the money for the fisheries sector,” Fadel said during a discussion about the ministry’s first 100-day program with fishermen at Muara Angke fishing port in North Jakarta on Friday.

He said the money could be used to develop businesses in the fisheries sector.

During a cabinet meeting on Thursday, Fadel acknowledged that the sector had been badly neglected compared with other areas of the economy, such as agriculture and mining, resulting in lower incomes for fishermen and a lack of access to bank loans and services. On average, fishermen make only about Rp 900,000 a month, he said.

Fadel’s comments were welcomed by Syahruna Fauzi, the chairman of the Jakarta branch of the Progressive Fishermen and Farmers Association (KTNA).

“Our conservative banking system has not catered to fishermen’s needs. For example, the banks won’t accept boats as collateral for loans. We don’t know why this should be the case,” he said.

Fishermen face additional difficulties, Syahruna said, including an inhospitable climate. He noted that fishermen have to tie up their boats during the wet season, normally between October and February, due to high seas and strong winds, leaving them without a source of income for four months every year.

Sofyan Basir, president director of state-owned PT Bank Rakyat Indonesia, said banks were committed to supporting small businesses in the fisheries sector, but admitted “the loans currently disbursed to the sector are very low.”

However, he said banks recently had relaxed lending criteria for fishermen.

“If the money is lent through the government’s soft loans scheme, it shouldn’t be a problem. Banks can even use boats bought by under the soft loans scheme as collateral,” he said.

The government should improve supporting infrastructure to help fishermen store and distribute their catches before banks would be willing to risk larger investment in the sector, Sofyan said. “Otherwise, I’m afraid many of the loans will turn bad.”

Regarding infrastructure, Syahruna said the country’s port facilities were grossly inadequate. Nearly half of the 20 fishing ports managed by the central government lacked the necessary infrastructure, such as cold storage facilities and good transportation links, according to figures from the Maritime Affairs and Fisheries Ministry. The vast majority of the 33 fishing ports managed by local governments are even worse.

“Poor road access to the ports and a lack of sanitation and hygiene facilities are the main problems,” said Yan Winata Sasmita, chairman of the Indonesian Fishermen’s Association (HNSI) .

Inadequate roads make it difficult to transport fresh fish to the markets, he said.

Responding to the fishermen’s concerns, Fadel promised to do his best to improve port infrastructure, in collaboration with the Public Works Ministry, although he gave no specific commitments.