OREANDA-NEWS. May 08, 2013. Agricultural Bank of China Limited (ABC) made a loan of RMB20 Million to an aquatic products refrigeration storage for frozen fish and shrimps. Chen Yiping, owner of his own business, the Fuzhou Mawei Strait Aquatic Product Trading Center, was granted the loan by ABC’s Fujian Branch. This is the first-ever personal warehouse receivables pledge loan made by a financial institution in China.

“Our major assets are the goods in the refrigeration storage, which are liquidities. I plan to rent more refrigeration storages to further develop cold-chain logistics for aquatic products.” Chen has been in the aquatic products business for 20 years. He was very excited, as this is the first time he has ever been granted a bank loan.

With an annual trade volume of RMB30 billion, Strait Aquatic Product Trading Center is the biggest aquatic product trading market in both China and Northeast Asia. This Center has established the largest single refrigeration storage in China, with a total storage capacity of 150,000 tons. There are 200 businesses engaging in aquatic product trading at the Center. Most businesses specialize in wholesale trading with relatively low profitability. The supply of aquatic products is greatly impacted by the changing of seasons.

Therefore, they need large liquidity during the peak seasons. In the past, due to lack of collateral for bank loans, the business owners had no choice but to borrow money from private lending companies at high interest rates and at great risks. Thus, huge cash flow gaps restricted the development of the aquatic product market.

In 2011, Strait Aquatic Product Trading Center was listed as a specialized market for preferential support by the Head Office of ABC. Based on the characteristics of the aquatic products business, Fujian Branch took the lead by initially launching six new financial services to meet the capital needs of SMEs, including Merchant Express, county-wide personal non-standard warehouse receipt pledge loans, and accounts receivable financing.

Over 30 businesses have applied to Mawei Sub-branch for personal non-standard warehouse receivables pledge loans totally RMB500 million. Previously, warehouse receivables pledge loans were only available to corporate customers. Now, those in the aquatic products business may also apply. ABC’s new loan program not only provides the capital needed by self-employed business owners but also sets a positive role model for narrowing the cash flow gap of the aquatic product business nationally.