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The BoC's novel credit scheme empowers Sri Lankan fishermen

Recovering from the ill effects of a three decade war in the North and East and recent natural disasters including flash floods, Sri Lankan Government is now setting about bringing stability through laying a foundation for strong economic development, with the fishing industry high on the agenda. Dr. Rajitha Senaratne has keenly grasped the challenge as Fisheries Minister since his appointment in mid 2010. Sri Lanka 's fisher and related community numbering one million are to be immensely benefited by a joint initiative of the Fisheries and Aquatic Resources Development Ministry and the Bank of Ceylon aimed at making the fishery industry the leading industry in the country.

The livelihood of 600,000 fishermen in the island will be improved with the implementation of the credit scheme for the fisheries sector development "Diyawara diriya". The Bank of Ceylon (BoC) has set apart Rs.1 billion for disbursement among fishermen under this credit scheme , for the first time in Sri Lanka , Bank of Ceylon Deputy General Manager, Product and Development Banking, Sam Samarasinghe revealed in an exclusive interview with the Sunday Times Free Hold section. The BoC would provide loans at on 8.00 percent interest rate. The repayment period will be a Maximum of up to 8 years including a 6 month grace period he added.

These loans will be given to purchase fishing gear including multi day fishing boats, Modern Electronic, Communication and safety equipment presently used in fishing industry Traditional Craft with nets for Marine and Inland fishing, Construction and maintenance of fish selling Stalls, Motor Cycles for fish trading, Commercial ventures intended to support / upgrade Inland fisheries and Aqua Culture such as fresh water fish and prawn production, nurseries, curing plants, processing plants, ornamental fish, Aquatic plants, tissue culture, ornamental aqua plants etc, and other fishery related self employment land based activities, Mr. Samarsinghe disclosed.

Release of loans could be made in stages on the basis of an agreed disbursement schedule and subject to actual progress of the project for which the loan is sanctioned. The Manager is requested to carry out an inspection of the project after the release of each installment of the loan. Loans for financing the purchases of equipment, tools, machinery and raw materials should be released direct to the suppliers, he added.

Main objective

The main objectives of the credit scheme are to increase the total fish production of the country according to the "Fish production enhancement proposal" made by MORFARD, generate income levels of the Fishers by encouraging them to convert their gill net boats to effective and responsible fishing operation, encourage fishers to explore the unexploited fish resources in coastal and Mid-deep sea water, minimize the post harvest losses and supply fish to foreign and local market in expected quality.
Mr Samarasinghe noted that Minister of Fisheries and Aquatic Resources Development Dr. Rajitha Senaratne has taken all measures through his plan to develop the fisheries resources, upgrade fisheries facilities, making available marketing facilities and enhancing knowledge of thrift of fisher folk in order to give a better social standing. The BoC as bankers to the nation has stepped into assist this programme under the directions of the bank's chairman Gamini Wickramasinghe.

The Fisheries and Aquatic Resources Development Ministry has signed an agreement with the Norwegian government to increase the number of multi-day fishing boats from 3,150 to 5,000.According to Minister . Rajitha Senaratne, the government hopes to eradicate malnutrition from Sri Lanka by 2013 while increasing the per capita fish consumption to 21.9 kg. the ministry has established over 80 Fisheries Corporation fish stalls islandwide to support it. Plans were underway to triple fish production and double the inland fish production as well fisheries ministry sources said. Various programs have been commenced for the development of fisheries resources, improvement of fisheries facilities, upliftment of marketing facilities and training for thrift among fisher folk by institutions coming under the purview of the Ministry i.e. Department of Fisheries & Aquatic Resources, National Aquaculture Development Authority, Ceylon Fisheries Corporation, Ceylon Fishery Harbours Corporation, National Aquatic Resources Research & Development Agency, Cey-Nor foundation and the Foreign funded projects coming under the purview of the Ministry in accordance with the new policies and plans of the Ministry of Fisheries & Aquatic Resources Development.

According to the Minister the alternatives measures are taken to uplift the economic conditions of fisher folk at off season and the reorganization of the fishing community and provision of funds from the revolving fund for such organization for income generating activities, implementation of programs to cultivate savings habits of the fishing community, provision of loans for self-employment, "Diyawara Saviya" loan scheme has been launched for 3,000 entrepreneurs at a cost of Rs.420 million for strengthening small scale enterprises and generating additional revenue in Tsunami affected areas in Kaluthara, Galle, Matara, Harnbantota, Trincomalee, Ampara and Batticaloa districts under the Post Tsunami Coastal Rehabilitation and Coastal Resources Management Project

Operations expanded

The Government's national policy on fisheries development and management stresses on empowerment of the community through their organizations to engage in self management of facilities in fish landing centres. Provision has been made under the fisheries regulations to extend it to manage the fisheries resources following co-management principles. The Department of Fisheries and Aquatic Resources has expanded its operations in all 15 fisheries districts through Assistant Director's Offices including Fisheries Inspector's Divisional Offices, fisheries ministry sources said.

The provision of facilities to improve and strengthen their mobility and communication systems by making available motor cycles and IT equipment including Internet and Samarsinghe said.
There were small scale fisheries being operated by over 37,000 small FRP boats and non-mechanized craft located in over 1,000 fish landing centres in Sri Lanka which contributed around 50 percent to the production. The balance is being produced by 3,700 multi-day boats and one day in-board engined boats operated through fishery harbours and anchorages. These statistics suggest that there is a strong justification to support development of common facilities in the small fish landing centres at relatively smaller investment. This would in turn create additional employment opportunities in the small scale fishery sector, he said.

Emphasis should be to reduce on-board and post harvest losses in fish products while improving fish quality that will contribute towards provision of a quality nutritional product to our consumers. Facilities should therefore cater to the needs of the fishing community operating at small fish landing centres that will reduce waste generation while building capacity to face increased competition in the market, he added. The BoC will assist Fishermen to acquire the Sea Water Refrigerator System for this purpose.
Sri Lanka is already well established as one of the leading nations in the Indian Ocean yellow fin tuna fishery and the country's exports of this species to 27 countries, mainly across Europe , and Japan . Tuna fish should be in highly quality for the export market, therefore it is essential for fishermen to use modern systems such as long line to catch tuna fish without causing any damage to its quality. This loan facility could be used to purchase such modern fishing gear he said.

Periodical inspections

Outlining the post credit supervision of the bank Mr . Samarasinghe said that if the facility has defaulted by more than 3 installments they are ready to seize the boat and handover to another party to operate by officially. Field Officers of the DFAR will be helped to branches for recovery actions. Branches should undertake periodical inspection of the projects financed by them to ascertain that the borrowers are engaged in the activities identified under the project, he said. In respect of acquisition of assets such as equipment, machinery, tools and raw materials for loans, the field officer of the branch should verify the supply of same to the borrower by the supplier to whom payment was made direct on behalf of the borrower soon after the loan was released and obtain an acknowledgement from the borrower which should be filed, he revealed.

The guarantee certificate issued by the supplier for due performance of the machinery, implements and equipment supplied to the borrower should be held by the branch during the warranty period. The borrower should be required to bring to the notice of the lending branch any manufacturing defects during the warranty period so that the branch could take up the matter with the supplier immediately for any corrective action, if necessary.

The Field Officer of the branch is required to carry out an inspection after release of each installment to verify the utilization of the loan for the intended purpose. A utilization verification report should be submitted by the Field Officer in respect of each installment released. The second and subsequent installment should be released only after submission of utilization verification reports covering earlier loan releases, he added.

Mr . Samarasinghe pointed out that the Field Officer of the branch should visit the project regularly with a view to maintaining close contact with the borrowers for recovery of loans. These visits are intended to verify the progress of investments and whether the borrowers continue to be in possession of items financed by the Bank and the investment yield as envisaged at the time of application.

Low cost protein

The importance of fisheries to Sri Lanka goes beyond the mere fact that Sri Lanka is surrounded by an Ocean. He said since the sea based marine fishery industries in many countries were facing more and more problems, the freshwater fishery sector has now become an important-even in Sri Lanka. He further said fish had become a valuable low cost source of protein to billions of people the world over and many countries facing more and more constraints lately, and as a result, the freshwater fishery sector has been gaining in importance.

Mr . Samarasinghe pointed out that Sri Lanka was well equipped to develop the fresh water fish industry thanks to the seasonal village tanks created by our ancient kings who ruled the dry zones.The BoC will provide loan facilities to the inland fishery industry under this credit scheme for fisheries sector development "Diyawara diriya" he added.

The value of Sri Lanka 's fishery exports has increased from US$103 million in the year 2005 to US$ 172 million in the year 2009 registering an average annual growth of 13.2%. The 13% annual growth has been further fuelled by the opening up of the Northern and Eastern regions.

The seasonal village tanks in the dry zone of Sri Lanka offer much potential towards a sustainable freshwater fishery sector which in turn has promising potential for export development
Mr. Samarasinghe said that many individuals through news channels have interpreted the essential food security in various ways, and one salient factor of the food security being talked about is the growing importance of fisheries in the overall national and international food security picture. It was in this light that he said that fasheries industry was a more significant sector to Sri Lanka than people tended to believe. Commercial ventures intended to support / upgrade Inland fisheries and Aqua Culture such as fresh water fish and prawn production, nurseries, curing plants, processing plants, ornamental fish, Aquatic plants, tissue culture, ornamental aqua plants etc were eligible to obtain loan facilities under this scheme he said.

Highlighting the BoC'S involvement in assisting the fisheries industry of Sri Lanka, Mr Samarsinghe disclosed that the bank had stepped in to provide loans to fishermen in 1975 for the first time in the history of banking in Sri Lanka. The Bank has already disbursed Rs.4,130 million under 24 loan schemes for the fisheries industry among 105,064 persons. By the year 2,000 the BoC has provided financial facilities to purchase one out of ten fishing boats at that time. One out of every 15 of the fishermen's force had obtained some kind of Loan facility from the BoC he said. 30% of the fisher community are BoC Bank account holders he revealed.

Only BoC is implementing this type of credit scheme. Therefore this is a good opportunity for the bank to serve a promising relevant customer base. An accelerated plan would be in place to identify and finance eligible good Projects, Mr . Samarasinghe revealed.

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