Tourism in­dus­try awaits sub­sidised work­ing cap­i­tal loans

Daily Mirror (Sri Lanka) - - MIRROR BUSINESS - By Nishel Fer­nando

„Says bank­ing sec­tor yet to grant in­ter­est sub­sidised work­ing cap­i­tal loans „THASL says talk­ing to the govt. to ex­pe­dite im­ple­men­ta­tion „Plans to grant work­ing cap­i­tal loans at con­ces­sion­ary rate of 3.4% an­nounced on May 8 „

Sri Lanka’s cri­sis-hit tourism in­dus­try is anx­iously await­ing the in­ter­est-sub­sidised work­ing cap­i­tal loans an­nounced by the govern­ment un­der the fi­nan­cial re­lief pack­age for the in­dus­try fol­low­ing the Easter Sun­day bomb­ings that crip­pled the once boom­ing in­dus­try.

Al­though the govern­ment, ear­lier this month, an­nounced the avail­abil­ity of in­ter­est-sub­sidised work­ing cap­i­tal loans for the tourism in­dus­try, The Ho­tels As­so­ci­a­tion of Sri Lanka (THASL) Pres­i­dent Sanath Uk­watte told Mir­ror Busi­ness that bank­ing sec­tor is yet to grant such loans to the in­dus­try.

“The banks are not im­ple­ment­ing it yet. We are try­ing to find out the rea­son. We are also talk­ing to the govern­ment to ex­pe­dite the im­ple­men­ta­tion as the govern­ment

agreed for it in prin­ci­ple,” he said.

The Fi­nance Min­istry on May 8 an­nounced plans to grant work­ing cap­i­tal loans at the con­ces­sion­ary in­ter­est rate of 3.4 per­cent for tourism sec­tor es­tab­lish­ments based on an­nual turnover, un­der the En­ter­prise Sri Lanka (ESL) pro­gramme with a twoyear re­pay­ment pe­riod.

Is­su­ing a cir­cu­lar on the same day, the Cen­tral Bank in­formed the bank­ing sec­tor to utilise the funds in ESL (Jaya Isuru) and Saw­bagya Loan Scheme of the Cen­tral Bank to grant work­ing cap­i­tal fa­cil­i­ties to the sec­tor.

Mean­while, Uk­watte noted that the tourism sec­tor es­tab­lish­ments and their per­ma­nent em­ploy­ees can now seek the one-year mora­to­rium on ex­ist­ing loans from all li­censed banks as the Cen­tral Bank had is­sued an ex­plana­tory note to banks clar­i­fy­ing who are qual­i­fied for the mora­to­rium.

“It’s now up to ho­tels to ne­go­ti­ate the mora­to­rium with banks, if there are any is­sues, the ho­tels can re­port to THASL. We will take it up with the Cen­tral Bank,” he added.

In ad­di­tion, the Cen­tral Bank also is­sued another cir­cu­lar on May 21 to re­quest the non-bank fi­nan­cial in­sti­tu­tions to grant one-year mora­to­rium on loans taken by the tourism in­dus­try.

Speak­ing on the special dis­counted pro­mo­tional pack­ages for tourists, Uk­watte said that the mar­ket­ing cam­paign pro­mot­ing these pro­mo­tional pack­ages in tar­geted desti­na­tions has to wait un­til the travel ad­vi­sories on the coun­try are ei­ther soft­ened or lifted.

The tourism stake­hold­ers were plan­ning to carry an ini­tial mar­ket­ing cam­paign, tar­get­ing Sri Lanka’s largest tourism source mar­ket, In­dia.

Uk­watte in­sisted that the govern­ment must take a lead role in the mar­ket­ing cam­paign, as the tourism in­dus­try con­trib­utes one per­cent of their turnover to Tourism De­vel­op­ment Levy.

Al­though, China last week soft­ened their travel ad­vi­sory for their cit­i­zens on trav­el­ling to Sri Lanka, Uk­watte ex­pects that it will take sev­eral months for the tourist ar­rivals from china to bounce back.

“The Chi­nese air­lines pulled out; hence, it will take cou­ple of months to re­sume their op­er­a­tions,” he said.

THASL Pres­i­dent Sanath Uk­watte

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