A Chinese bank has signed a deal with local fishery authorities in China’s leading fishing port that will see high-priced loans designated to long-distance fishing firms for the purpose of modernizing their trawlers.
The Bank of Hangzhou will lend up to CNY 1 million (USD 146,564, EUR 125,188) per vessel as part of the deal, which was arranged by the Zhejiang Fishery Mutual Insurance Association with loans capped at 50 percent of the insured value of the vessels. Interest rates are a whopping 30 percent above the normal commercial lending rates, according to the bank.
Banks have traditionally shied away from the fishery and aquaculture sectors due to worries over collateral and a lack of understanding of the fishing sector. However, insurance coverage on boats has assuaged some worries among lenders.
Fishing firms appear to need the funds – 26 companies were represented at the signing ceremony in Zhoushan. Among them were well-known firms like Ping Tai Rong Ocean Fishery Co. as well as the Zhu Tai, Hai Li, and Jia De companies.
Opening up bank financing is key for the growth of Zhoushan’s long-distance fishing industry, explained Chang Jian, secretary general of Zhejiang Fishery Mutual Insurance Association, speaking at a signing ceremony for the loans. He claims that CNY 1 billion (USD 146 million, EUR 125 million) has been secured in loans by fishing companies in cooperation with his organization for the arrangement of insurance cover.
Zhoushan’s fishing sector is politically connected; Yu Xiong Wei, chief engineer at Ping Tai Rong Ocean Fishery Co., was elected to this year’s sitting of the People’s Congress of Zhejiang Province, and promised to use his new position to “promote the long-distance fishing sector...”
