Jakarta – Indonesia is likely to face a bumpy road ahead to boost its fisheries sector as banks are showing a reluctance to disburse loans to players in the industry, citing high risks and the sector's vulnerability to regulatory changes.
Fishery products are perishable; thus, they must be preserved using good cold storage facilities. Without careful handling, businesspeople and fisherfolk have to incur losses from damaged goods, Indonesia's vice president director of state-owned lender Bank Rakyat Wahyu Sulistiono said on Monday.
"Only about 1 percent of the bank's total loans have been channeled to the fisheries industry; this sector is very risky," he said during the national working meeting organized by the Indonesian Chamber of Commerce and Industry.
The industry, he added, was also highly sensitive to changes in regulations. For example, after the Maritime Affairs and Fisheries Ministry issued Ministerial Regulation No. 2/2015, which bans the use of all types of trawls and seine nets, fisheries production declined significantly.
Bank Negara Indonesia's (BNI) general manager Josie Situmorang said the state-owned bank also faced similar challenges, as the uncertain nature of the industry was making it prone to creating bad loans.
"BNI conducts risk mapping and found out many risks in the fisheries sectors, including the risks of raw materials supply and sustainability, weather changes and fish price fluctuations," he said. (win/hwa)