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Fishermen struggle to pay back loans

Many licensed fishermen in cyclone-affected Myanmar received loans to repair their boats, but now struggle to repay them. The country's fishing sector was badly hit by Cyclone Nargis, which left nearly 140,000 people dead or missing CM/IRIN
Fishermen hit by Cyclone Nargis are struggling to pay back government loans meant to jumpstart their livelihoods.

While the loans have helped, more assistance will be needed to sustain them for the long term, they said.

"I'm not sure whether I will be able to make the payments in time," Mya Win Maung said from his home in Pyapon, in Ayeyarwady Delta.

In July, he received a US$800 loan from the Livestock and Fisheries Development Bank to repair his 30ft vessel at an interest rate of 1.42 percent per month for one year.  
"Within six to nine months we have to pay back half the loan," the 56-year-old, one of 1,288 fishermen who qualified under the scheme, explained.

Others acted as guarantors for friends' loans, and could find themselves in greater debt if their colleagues default.

"I don't think many of us will be able to pay on time. We may become fishermen without vessels next year," Mya Win Maung warned.

Debt mountain

Between June and November this year, the government lent more than $2.2 million to fishermen affected by Cyclone Nargis, in amounts ranging from $250 to $25,000, a bank official, who declined to be identified, told IRIN.

Qualifying fishermen were required to submit property deeds for collateral. In addition, applicants had to provide at least four guarantors - mostly fellow fishermen.

"We provide special loans for fishing vessel owners intending to restart their business. Generally, we provide loans based on the value of their property but in this case, the four guarantors are more important for repayment," the bank official said.

But for some fishermen, the loans have only put them in greater debt.

Others maintain that while the loans have helped, they are not enough to sustain their business.

With a complicated application process, some fishermen even became brokers to their colleagues, adding 10 percent more to the expense, while at the same time encouraging them to take out larger loans than necessary.

"Brokers told fishermen in our village that they would be able to secure a bigger loan if they paid an additional 10 percent," Mya Win Maung said.

After travelling costs to go to Yangon to sign the bank documents, bank fees and additional broker fees, some are now in a worse state than before.

A young fisherman in Myanmar's cyclone-affected Ayeyarwady Delta tends to his boat. Many small-scale fishermen are in dire need of assistance to restart their livelihoods more than seven months after Cyclone Nargis 200812178
Photo: Contributor/IRIN
A young fisherman in Myanmar's cyclone-affected Ayeyarwady Delta tends to his boat. Many small-scale fishermen are in dire need of assistance to restart their livelihoods more than seven months after Cyclone Nargis struck
Fire sales

For scores of small fishermen who never qualified for the loans, the prognosis could be worse still. Seven months later, some fishing boats remain unrepaired and have been rendered unusable.

To cope, some have begun selling off their productive assets, including fishing nets.

"Some vessels are now used for carrying firewood instead of fish because of their not having enough fishing equipment or not enough money to repair the boat," said a fisherman, who said he had had no help, aside from the loan.

"The loan is not enough. We still need help from the department of fisheries and the Myanmar Fisheries federation. Otherwise we can't recover," he said.

Devastated sector

More than 1,800 licensed boats were officially reported lost in the storm, most non-motorised; however, the number could be much higher, according to the Post-Nargis Joint Assessment (PONJA). http://www.asean.org/21765.pdf

Fishing is the second-largest source of income for the households living in the delta.

A village track assessment undertaken at the time reported that half of all boats had been lost, plus 70 percent of fishing gear.

According to the PONJA, the total estimated damage to the fisheries sector is estimated at close to $25 million, with total losses from forgone production projected at more than $108 million.

The impact on fisheries, both marine and inland, and aquaculture included damage to the industry's infrastructure such as ponds, hatcheries and jetties and damage to equipment such as boats and nets.

Post-harvest capabilities were also damaged, including the loss of ice production and cold storage facilities, fish processing, marketing and transport infrastructure, the assessment said.
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