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VietNamNews

Tight loans hinder "tra" processors

Update: March, 13/2013 - 08:00
Workers process tra fish for export at Go Dang Seafood JSC. Difficult access to loans is hindering tra fish production in the Mekong Delta. — VNA/VNS Photo Minh Tri

HA NOI (VNS) — Tra processing factories in the Mekong Delta region are running out of fish because many farmers have empty ponds due to lack of money.

According to the Ministry of Agriculture and Rural Development (MARD), loans are difficult to obtain for both fish breeders and processors.

The problem was raised in a ministerial report after a survey of tra fish production in Dong Thap, Can Tho and An Giang provinces last year, which was sent to the State Bank of Viet Nam (SBV) and the Ministry of Natural Resources and Environment (MNRE) recently.

Deputy Minister Vu Van Tam of MARD said the survey at Chau Phu Fisheries Cooperative in An Giang shows that many households cannot get credit from banks because they do not have enough assets to secure new loans.

Meanwhile, they suffer losses from last year's production due to the fish's selling price of VND2,000-3,000 (US$0.095-0.14) a kilogram lower than costs.

All of the cooperative's members need credit, he said. However, only few can borrow money from the Viet Nam Bank for Agriculture and Rural Development (Agribank) with preferential rates, but most with low credit limits.

The survey found only 13 members of the cooperative have been given loans from Agribank since last August, but most of these are extensions of the maturity of old debts.

So, in fact, farmers do not get additional money to invest in breeding, said the ministry, adding that procedures at Agribank are still complicated while interest rates at other banks remain high.

The same situation has also hit processors. The survey at three difficult enterprises — Thuan An, Viet An and Viet Ngu — found these companies are always short of capital.

Current loans from banks are not enough for the companies' demands while they do not have mortgages for their new loans.

The enterprises are calling for higher evaluation of inventories as mortgages for higher credit limits.

According to An Giang Province People's Committee, local enterprises encountered difficulties in accessing loans last year despite support from the Government.

Vice-president of the province's Seafood Breeding and Processing Association, Le Chi Binh, said loan procedures at banks were complicated and credit limits low, adding that few households were given loans with interest rates of below 11 per cent a year.

Meanwhile, costs such as electricity, water and feed prices keep increasing for enterprises and farmers.

Duong Ngoc Minh from the Viet Nam Association of Seafood Exporters and Producers estimated that 80 per cent of the enterprises were facing financial problems.

MARD blames the problem on the fact that enterprises and farmers cannot get mortgages for new loans while banks do not lower interest rates. As well, loan terms (often only four months) are not appropriate for production cycles, which run from eight to 12 months. — VNS

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