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n a bid to support President Joko '€œJokowi'€ Widodo'€™s lofty maritime axis plan, the Financial Services Authority (OJK) has instructed banks to increase credit for the sector by 50 percent to Rp 128 trillion this year, an official says.

OJK deputy commissioner for banking supervision, Irwan Lubis, said the financial authority wanted credit for the maritime sector to increase by Rp 43 trillion this year to speed up development.

'€œWe have done this because finance for the marine sector is still at a very low level,'€ Irwan said during a discussion in South Jakarta on Monday.

Credit disbursed to businesses in the sector reached Rp 85 trillion last year, according to OJK data. That amount was roughly 2.4 percent of total credit disbursements in the country.

Irwan said banks were wary of extending loans to the sector because of a lack of understanding between them and debtors. '€œThat'€™s why we'€™re creating a database to build up information [on the sector],'€ he said, adding that it was mapping out six sub-sectors, from capture fisheries to marine tourism.

In addition, the OJK and lenders will train 1,000 accountants to understand the ins and outs of the maritime industry. They will also print guidebooks to help increase financial literacy among small-scale enterprises (SMEs) working in the sector.

He said banking institutions had identified the sector'€™s high rate of non-performing loans (NPLs) as a hurdle to financing businesses, although it had improved over the years.

The maritime sector'€™s NPL rate last year was 3 to 3.5 percent, better than five years ago when it exceeded 5 percent. Irwan said that an NPL rate of 2 to 2.75 percent was ideal to mitigate any risks and keep businesses sustainable.

In February, the OJK formed a team of experts comprising officials from the Maritime Affairs and Fisheries Ministry, banks and insurance companies. The team'€™s task is to sift through business proposals to identify prospective businesses to which to extend loans, all the while identifying risks and maintaining lending quality.

The Indonesian Chamber of Commerce and Industry'€™s (Kadin) deputy chairman for maritime and fisheries affairs, Yugi Prayanto, said the industry group'€™s regional representatives would help the team by scouting for sound business proposals and forwarding them to it.

Yugi said Kadin would prioritize proposals from the aquaculture sector and other fisheries-related industries, arguing that these were areas that required the most development.

Meanwhile, PT Bank Rakyat Indonesia'€™s (BRI) head of business programs and partnership business division, Teten Triadi, said his institution was committed to the OJK'€™s cause.

Teten cited the company'€™s target of disbursing Rp 2.5 trillion to Rp 3.5 trillion in credit through its Rp 11 trillion sector-specific credit total this year, as well as an additional Rp 2.5 trillion in its new '€œfood credit'€ program that would benefit businesses working in the food sector.

Banking institutions have also voiced concerns regarding the difficulties in navigating the maritime sector.

According to Teten, maritime industry players, most of which are small-scale fishermen and SMEs, can still benefit from proper guidance regarding the financial system.

'€œ[Businesses in this sector] are in need of coaching and mentoring; they can'€™t be left alone, especially with the technicalities of financing. This is important to ensure the conduciveness of financing,'€ he said on Monday.

Meanwhile, Bank Mandiri senior vice president for micro-network development, Maswar Purnama, said that financing institutions were hard pressed to find a way to mitigate the risk of the sector'€™s seasonality, often resulting in credit flowing to other sectors considered more attractive.

Maswar hoped that the situation would improve this year, although he declined to share his projections. Last year, Bank Mandiri disbursed Rp 1.7 trillion to 61,000 customers.