For new wooden vessels they can borrow 70 per cent at the same interest rate though only a 3 per cent subsidy will be provided.— VNA/VNS Photo Viet Y

HCM CITY (Biz Hub) — Fishermen can get subsidised loans at 1-3 per cent interest for buying boats under a Government credit programme for which State Bank of Viet Nam has issued a draft circular.

The circular, to take effect from August 25, focuses on policy support for fishermen going to the high seas for fishing.

It allows individuals and organisations to borrow up to 95 per cent of the cost of a new boat if built of metal at an interest rate of 7 per cent, with the SBV providing a 6 per cent subsidy.

For new wooden vessels they can borrow 70 per cent at the same interest rate though only a 3 per cent subsidy will be provided.

Metal boats with an engine capacity of 400-800HP can borrow up to 90 per cent with a 5 per cent subsidy. The subsidy will rise to 6 per cent if the capacity is 800 HP or more.

The loans will be 11 years and borrowers can use the new ships as collateral.

According to the Viet Nam Economics News, SBV Governor Nguyen Van Binh said the central bank would instruct banks to ensure that the loan procedures are completed quickly to make access to capital easy for fishermen, businesses, and co-operatives.

Banks must take the initiative to assess and identify borrowers from lists approved by local governments, he added.

The new decree has been welcomed by fishermen because it addresses their major problem – that of raising funds to build large ships for deep-sea fishing.

Huynh Trung Dung, a fishermen in Kien Giang Province's Kien Luong District, said: "This has brought great benefit to fishermen in need of capital.

"Not only are the loan amounts high, interest rates low, and vessels allowed to be mortgaged for the loans, but also fishermen can pay the principal and interest over a long period.

"Fishermen will have time to build ships without worrying about paying the principal and interest in the initial years."

A Vietinbank official, who asked not to be named, said: "The decree gives great encouragement to fishermen to go offshore.

"These credit support policies will help fishermen feel confident about taking loans to build large vessels and invest in modern equipment for fishing in the high seas, thus helping develop the economy and ensure the country's sovereignty over its waters and islands."

Many banks have set aside considerable amounts for the programme and would lend as soon as the circular takes effect, he said. — VNS