Loan woes for fishermen

CHENNAI: It''s over four months sincethe tsunami struck the Tamil Nadu coast, washing away a prosperous economy. Theinterest and excitement has waned, but fishermen are unable to return to theirprofession. Standing rock-like in their path is the Central assistance announcedby the finance ministry mainly in the form of loans.The reason: Withtheir livelihood and property washed away, the fishermen have nothing to providein the form of surety, nor do they make any profits to pay back the loans. Ifsome have taken loans, it''s only because of efforts by some bankers to relaxloan norms where no surety is demanded and payback is waived for the firstone-and-half years.Initially, from the Central allocation, financeminister Chidambaram announced that a 35:65 subsidy:loan would be disbursedthrough nationalised banks. TN protested and demanded that the money be routedthrough the state in the form of grant.As my government has beenrightly maintaining, there is no response from the fishermen for bank loans fora variety of reasons and this is not the time to coerce them into obtaining aloan which they are not happy with," Tamil Nadu chief minister J. Jayalalithaahad said in a statement after the announcement of the loan on January 29.Chidambaram clarified on January 31: "Like any subsidy-linked loans, such as thePrime Minister''s Rozgar Yojna, Swarnajayanthi Grameen Swarozgar Yojna and othersimilar loans given by the Khadi and Village Industries Commission, this wouldalso be given through the banks."Following pressure fromJayalalithaa, the subsidy portion was given to the state as grant for reliefworks.The rest was routedthrough the banks under a tsunami scheme named after late Rajiv Gandhi.According to a government official, the Centre had sanctioned Rs 2,347 crore andso far it has disbursed Rs 627.80 crore. On Wednesday, the World Bank sanctioned$435 million as soft loans to TN. It is immediately not known if this is part ofthe Central funds, which the Centre is arranging in association with WB, theofficial said.But under the tsunami loan scheme, fishermen takingloans under various subsidies are given a moratorium/holiday period of 18 monthsafter which they pay back the loan in seven years at seven per cent interest.And if the repayment is regular, there is a two per cent discount on theinterest.The Fisheries Department then released the list offishermen who came under different branches and those fishermen could approachthe respective bank and branch to seek loans. After a wait to see if the loansare converted into grants, some fishermen are beginning to take them for buyingor repairing boats.While one constraint is that the banks demandsurety for giving loans, another is that the fishermen feel that even afterreturning to their livelihood, there won''t be enough earnings to repay theloans. There is lack of uniformity in loan procedures in the banks. In someplaces, the banks demand surety or collateral security, which the tsunamivictims do not have, whereas in some banks, thanks to efforts of collectors andbankers, the surety is waived.For instance, Kanyakumari collectorSunil Paliwal, last week organised loans from the State Bank of India for buyingmechanised boats. "After a series of meetings, it was decided that the fishermenwill stand mutual security and their boats would be hypothecated to the bankuntil the loan is repaid," said Paliwal. Here, the recipients availed of mostlyRs 20 lakh loan where Rs 5 lakh waived in the form of subsidy.The Nagapattinam branchthe SBI was not willing to release the loan until the bills of all the purchaseswere submitted. "Not even a bolt or nut will get paid unless produce a bill.When there''s uncertainty over our next meal, how can the government think we''llbe able purchase material required for the boat?" asked Nagore panchayat memberV. Govindarajan.Nagapattinam district was almost completely ravagedby the tsunami but no one has touched the loan meant for 387 mechanised boatswhich were damaged.Today, the state government and the bankers haveeven stopped encouraging the fishermen to take up loans.InCuddalore, the loans mainly for repair of mechanised boats and the loansassessed by the Fisheries Department is between Rs lakh to Rs 2 lakh per head.For S. Rajasekharan from Periyakuppam, Bank of Baroda has waived surety for Rs1.16 lakh loan for repair FRP boat. But Indian Bank has demanded documents andother surety from Ibrahim of Akkaragori Rs 1.5 lakh for repair of catamarans andsmall boats.