Microcredit helps fishermen increase hauls
Posted by Página do Microcrédito em 16 julho, 2007
by Minh Huong
HA NOI — Creditors aren’t paying enough attention to poor fishermen and farmers in coastal areas, said delegates at a Ha Noi workshop on micro loans and sustainable living in coastal regions.
Members said small loans could make a world of difference and cited the case of Tran Van Thanh in Khanh Hoa Province’s Van Hung Commune.
Three years ago he received VND2.5 million (US$156) to invest in lobster cultivation. In only a short time, Thanh, using old lobster cages he’d found, was able to pay back his loan and earn enough to put more money into his burgeoning business and buy a raft.
Thanh is doing very well now and even has a television and motorbikes on top of a new house.
Truong Ngoc Anh, deputy director of the bank’s Credit Fund Department, said micro credit played an important part in poverty reduction in many countries around the world and could do the same here.
A larger number of communities reside on Viet Nam’s 3,000km coastline, and thus, there was a high demand for capital to improve their lives and boost production capacity, Anh said.
Anh also said these residents were more likely to be victims of storms and typhoons and therefore needed these types of loans more than other regions.
However, this idea would be difficult to implement because ventures in this area often carried high risks and could permanently damage the environment and cause bankruptcy for businesses depending on these resources, issues that makes creditors unwilling to lend capital.
As a potential remedy, Anh suggested residents learn more about the environment and focus on sustainable cultivation activities as part of their applications to the bank.
Bui Quang Tap from the Khanh Hoa Social Policies Bank said his organisation had loaned money with an interest rate of 0.65 per cent per year. Those with less income are allowed to borrow a maximum of VND30 million.
However, fisher men at the meeting said this wasn’t enough.
“Rich and middle class fishermen have easier access to bank loans, but the loans are not available yet for the poor,” said Bui Van Thuong, deputy director of the Viet Nam Fishery Association.
The deputy director said well-to-do fishermen received loans worth hundreds of millions of dong because they had collateral like land certificates and other assets to secure the credit.
Micro-enterprise development consultant Nguyen Thi Bich Hanh said her survey showed more than 2,000 households, accounting for nearly 10,000 people, in Van Hung could benefit from small loans with low interest rates to kick-start businesses.
Hanh’s research revealed that most residents were forced to borrow money from other sources that do not offer preferential interest, which can be devastating to already poor families.
The annual income of most fishermen was upwards of VND10-15 ($625-937) million per year, but it is wholly dependent on the season and often falls short of what they need to survive comfortably.
Therefore, more than 83 per cent of the commune borrow money from their family because they cannot afford to get loans from banks, said Hanh.
She found that this community had not tapped into its tourism potential even though it’s only 60 km from Nha Trang as well.
Nguyen Thi Dien, chairwoman of the Women’s Union in Van Hung said her group had helped many farmers escape poverty with small loans that the union borrows from banks.
Dien said farmers could take advantage of micro credit, but fishermen had more trouble making a profit despite the extra capital.
The union was working with the Centre for Marinelife Conservation and Community Development (MCD), a non-government organisation, on a project to create an eco-tourism site in the commune to change this, she said.
About 20 families had started billeting tourists in their homes as part of the programme, Dien added.
MCD has created its own seminar to share findings and further evaluate the need for micro finance in Khanh Hoa and Nam Dinh Province’s coastal communities.
Nguyen Thu Hue, MCD’s director, said her centre was not in the business of providing and managing microcredit for communities. However, they would like to mobilise finance organisations to help support development projects. — VNS