Abstract
he agriculture, forestry, and fisheries sectors have a share of 22.05% with 4.21% growth in North Sulawesi. The fisheries sub-sector dominates by 30%. The disbursement of banking institutions' credit for the sector increased by 35% in 2015-2017 but absorbs only 7% of total loans disbursed. The reluctance of formal financial institutions to provide credit to improve small fisheries has increased in non-formal financing. This study identifies factors influencing financing sources choice, comparison of bank and non-bank financing sources, and recommend adaptive financing patterns for small fisheries. Based on descriptive qualitative analysis of in-depth interviews with 32 respondents from 85 Pajeko fishers (mini purse seine) in the Bitung Oceanic Fishing Port (PPS), concluded that 97% of Pajeko fishers in Bitung chose non-bank to finance their operation with determinant factors of financial source: (i) easiness administration (88%), (ii) payment flexibility (78%), and (iii) collateral (69%). The result of comparison simulation shows that boat owner financing with profit sharing for three (boat, boat owner, crews) is the most profitable for the boat owner, while bank loan financing with profit sharing for two (boat owner, crews) is the most profitable for crews. Accordingly, an adaptive financing strategy development is recommended for banking institutions based on influencing factors of fisher’s choices and Pajeko fisher’s characteristics-based approach. Keywords: Pajeko fishery, resource of financing, bank financing source, non-bank financing source, adaptive financing
Highlights
Fisheries is an important economic sector and a major contributor to the growth development of the province of North Sulawesi
This study provides recommendations for banking institutions on the financing programs for small-scale fisheries based on the characteristics of Pajeko fisheries in Bitung
The study was conducted at the Bitung Oceanic Fishing Port (PPS), North Sulawesi
Summary
While according to Kusumawati (2010), small-scale capture fisheries businesses need support to be able to access credit with low-interest rates to help with capital. In order to capture the small-scale fisheries market share, banking institutions need to innovate more through business financing programs that are adaptive to industrial capacity. Yuniarti saw that in order to win the competition of financial institutions in capturing the market share of the small business financing sector, BPR created an adaptive strategy. These strategies include strengthening industrial infrastructure, partnership programs with commercial banks, and maintaining flexibility in working with the lower middle economic community. The non-bank funding sources referred to in this study are individual creditors in Bitung
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