Bad debt on the rise among boat owners
Bad debt on the rise among boat owners
The number of non-performing loans had been on the rise among recipients under a Government directive (Decision 67/2014/ND-CP) to support Vietnamese fishermen to build or upgrade their fishing vessels, according to a report by the State Bank of Vietnam (SBV).By December 31, 2017, the deadline to finalise loans to build new or upgrade existing fishing vessels, banks had approved loans to build over one thousand new boats and upgrade 146 vessels with total assets of VND11.7 trillion.
However, banks said there had been a worrying trend as the number of bad loans had started to rise across 11 coastal towns and provinces. In 2017, bad loans under Government Decision 67 accounted for just 3 per cent, but that figure had risen to 17 per cent at the end of last year. An SBV report put the figure now at a staggering 27.8 per cent.
The report pointed out a number of factors that had resulted in the disastrous outcome of the scheme. Among them was fishermen’s reluctance to meet their financial duties as they believed they had received the money as part of a Government grant.
In order to address the issue, the SBV has made recommendations to the Prime Ministerial Office to co-ordinate efforts across ministries and agencies to support both fishermen and commercial banks.
Fishermen unable to make payments for reasons beyond their control such as poor quality of vessels, significant damage due to natural disaster, sickness or traffic accidents would have their payments and interest rates readjusted.
Commercial banks were told to help fishermen, who no longer wanted to or were unable to afford the vessels to find potential buyers. There has been some success in this approach with more than ten vessels finding new owners.
It has not been smooth sailing for many who took out loans to upgrade their fishing vessels under the Government's initiative. Complaints have been made over the quality of fishing vessels, poor catches and lack of manpower, all contributing to dismal economic results for boat owners.
For cases in which fishermen refused to honour agreements made with commercial banks without justifiable causes, legal action could be considered after all attempts to settle had failed.
