State aquaculture loans recipients are three times more likely to default than agricultural loan recipients. For the most part, private lenders won’t touch them. According to Doreen Shishido, head of the state Department of Agriculture’s loan division, more than one third of the program’s aquaculture loans experience default. Typically, default rates are less than 10 percent for agricultural loans.
While she hates to criticize aquaculture, (Her department also houses the Aquaculture Development Program, the industry’s eternal cheerleader) she says when she receives loan applications for aquaculture, “I get kind of nervous about it. Aquaculture has not been very successful in the islands.”
The state is a lender of last resort, a place to go once the banks have turned their backs. Shishido expects some level of risk. “Obviously, we don’t have the cream of the crop, but it’s not a grant program so we do have to be careful in our analysis.”
Right now, the state has about 15 aquaculture loans totaling a little more than $700,000: seven on the Big Island, three on Maui, and five on O`ahu. Since the program’s inception, 57 loans have been approved totaling $3,029,500.
While the defaults aren’t in the millions, they aren’t insignificant and a couple of deadbeats haven’t made payments in years.
A woman named Elaine Dollnig had two loans totaling $52,000 approved in the early 1980s that were to mature in 1987 and 1988. Her last payment for both loans was in January 1998 and she still has an outstanding balance, interest included, of $60,719.
Hawaiian Aquaculture Product Group Partners is also delinquent on its two loans. The company received the loans totaling $175,000 in 1993 and was to have paid them off by October 1999. One of the loans hasn’t been paid since late 1997, the other, not since last June. Their delinquent amount: $200,890.
Despite the defaults, she doesn’t fret too much over the defaults, because, for the most part, “The loans are small.” The maximum amount normally allowed to an aquaculture company is $500,000.
–Teresa Dawson
Volume 12, Number 12 June 2002
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