Financial services for small and medium-scale aquaculture and fisheries producers

This article summarises the results of case studies carried out in six developing countries. The case studies analyse the economics of small and medium-scale aquaculture and fisheries enterprises, in particular their capital requirement to cover investment and operating costs, and discuss the demand and supply of financial services. Given that capture fisheries face problems in many parts of the world due to stagnating or declining stocks, it is likely that in the future aquaculture, including mariculture, will have to play an increasing role in supply. In order to achieve sustainable growth in aquaculture businesses in sub-Saharan Africa a range of constraints—technical and financial—need to be overcome. Traditional financial instruments seem unable to meet the financial needs of small and medium-scale enterprises (SMEs) in the aquaculture and fisheries sector. Accordingly, innovative financial models for SMEs need to be developed to fill the gap between traditional banking and grant-based donor finance. One key characteristic of investment funds specialising in SMEs in Africa is the combination of investment funds with business development funds in order to ensure the economic growth of SMEs as well as the likelihood of prompt loan repayment.

► Poor access to credit is one of the major constraints to the development of SMEs in the aquaculture and fisheries sector.
► Traditional financial instruments are unable or reluctant to meet the needs of SMEs, particularly in Africa.
► In least developed countries SMEs in the aquaculture and fisheries sector still rely heavily on informal sources of credit.
► Informal sources of credit are often either inconsistent or have unfavourable terms and conditions.
► New financial models for SMEs are required to fill the gap between traditional banking and grant-based donor finance.