Tourism industry awaits subsidised working capital loans
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.