Government issues loans to 14 recipients under fisheries loan scheme

The government has issued MVR8.6 million (US$557,717) worth of loans to 14 boat owners and fishermen under a fisheries loan scheme.

President Abdulla Yameen presented award letters at the President’s Office this morning.

In his remarks at the ceremony, President Yameen said the loan scheme was “a stimulus” to the economy, which would be beneficial to one of the most important industries in the country.

“For the population in islands, the employment that brings the biggest income is still, without a doubt, the fisheries sector,” he said.

The “impetus or stimulus” for the fisheries industry was part of the government’s efforts to “improve the fundamentals of the economy,” he added.

According to the fisheries ministry, 60 percent of the funds were earmarked for youth. The loans were issued at a six percent interest rate, the ministry said, and was intended to provide financial support for boat building as well as purchasing engines and other equipment.

Fisheries industry

The annual fish catch in the Maldives declined from approximately 185,000 tonnes of fish caught in 2006 to about 70,000 tonnes in 2011.

In its latest monthly economic review, the Maldives Monetary Authority revealed that in January 2015 “the volume of fish exports declined by 18 percent in annual terms due to the decline in export of both frozen skipjack tuna and yellowfin tuna exports.”

“Similarly, earnings on fish exports also declined by 14 percent during the review month, which can be attributed to the fall in frozen tuna exports,” the review stated.

Yameen meanwhile said the government’s objective was encouraging youth to take up fishing by providing loans to cover the high initial capital investment.

He noted that the loan scheme was part of the ruling Progressive Party of Maldives’ manifesto pledges.

The present loan scheme was “symbolic” as the figure was a fraction of the state budget, Yameen observed, but higher amounts could be allocated in the future based on the interest from the public.

As only three of the 14 recipients awarded the loans today were young fishermen, Yameen urged more youth – the “target group” – to apply.

The amount allocated for the loan scheme could be doubled if 80 percent of the 14 recipients had been youth, he said, adding that the mindset of Maldivian youth needed to change.

The willingness of youth to become gainfully employed or start up enterprises was essential for the success of the government’s youth programmes, he said.

Fishermen in the Maldives earn a high income, Yameen continued, suggesting that the low number of fishermen who have joined the government’s insurance scheme showed that fishing was lucrative.

The ‘beyas nubeyas’ insurance scheme was part of a PPM pledge to provide MVR10,000 (US$649) a month to fishermen during lean periods.

For the scheme to succeed, Yameen said fishermen needed to register for the government to manage the fund.

“But we believe there isn’t that much of an interest in this because an individual believes his income is higher than MVR10,000,” he said.

“If not, the interest would be there. If you are to join an insurance scheme, you have to pay some kind of premium from the day you join.”

The lack of interest suggested that fishermen did not want to pay the premium as they earned enough during peak periods, Yameen said.