Financing and Marketing Management

Unit 5 - Role of NABARD in fisheries development

5.11. Various loan schemes of commercial banks
Pledge loan
Pledge loans are another form of medium loans advanced by commercial banks (including SBI) to the fishing industry like any other industry. They are of different kinds such as lock and key advances, factory type advances and ‘mandi’ type advances at various interest rates. Pledge loans are normally advanced for a period varying from three to five years. When perishable assets are pledged however the term is much shorter. When the loan is for the construction of processing facilities the term may be as long as to 10 years.
Packaging credits (Short term loans)
The short-term credit supplied by commercial banks to the fishing industry consists of packaging credits and others. Packaging credits are need based and not security oriented and is advanced normally against a letter of credit for a period upto 180 days at a particular interest rate. Packaging credits are very helpful in procuring and processing the raw materials. It is very popular among fishery processors especially at Cochin.
Other short-term credits
Like other industries the Indian fishing industry also takes advantage of normal commercial bank short term financing facilities in connection with purchase and collection of cheques and bills and overdrafts.