Tourism industry eyes credit line
Sri Lanka’s tourism industry is expecting to engage with an international funding agency to provide a credit line to help them out of their current crisis as time to repay their debts has run out.
As the Central Bank has refused to allow any further moratoriums the industry is now compelled to obtain a credit line through the assistance of an international funding agency but this is subject to the International Monetary Fund’s (IMF) programme being initiated in Sri Lanka.
Former Sri Lanka Association of Inbound Tour Operators (SLAITO) President Mahen Kariyawasam told the Business Times that the industry is facing a grim situation as they have to engage with their banks on an individual basis on resolving the loan repayment.
Sri Lanka is awaiting an IMF US$2.9 billion loan which has yet to be approved until the country reaches debt restructuring agreements with China and India. Until the IMF loan is provided no international funding agency can move in to provide financial assistance to Sri Lanka.
Due to the financial crunch that the industry is faced with as a result of a limited number of arrivals to the country, he noted that they are now in discussion with possible international funding agencies to obtain a credit line as the only mode of financial assistance.
Although the industry is unable to repay the loans immediately it is also uncertain whether banks will resort to litigation.
Mr. Kariyawasam also explained that at the moment they are receiving a good number of bookings from Europe in addition to the increased number of arrivals from the Russian market.
Tourist Hotels Association President M. Shanthikumar said that they do not believe banks will resort to litigation or takeovers in the event they request for further extension of the time period to pay back their loans.
Meanwhile the industry has established a joint committee to discuss with banks and other funding agencies on moving ahead amidst the financial crisis.
Although the industry is unable to repay the loans immediately it is also uncertain whether banks will resort to litigation.