Sri Lanka provides Rs300mn loan to SME’s in the tourism sector

Sri Lanka will also ask banks to extend new loans for small and medium-sized enterprises (SMEs) of up to 300 million rupees to the tourism sector, the government information department said. Sri Lanka's Minister of Industrial Development, Investment Promotion, and Civil Aviation Prasanna Ranatunga quoted as saying that the Easter Sunday attacks had caused major industry setbacks in which most of the hotels were in default.

"Entrepreneurs in the tourism sector have appealed to us to give them some help in reviving their business. That's why we decided to extend the SME loan facility for 300 million rupees also to them," the minister said.

Earlier, a circular central bank said manufacturing, agriculture, services, and construction sectors could take advantage of a moratorium on debt and a 300 million rupee loan for credible business plans.  The credits will be the average rate offered to top clients of a bank for five years, with a one year grace period and at the average weighted prime lending rate.

It is unclear whether the tourism industry not included in the central bank's circular services sector. Earlier in 2019, the ttourism sector was provided with a debt moratorium alongside working capital loans.

Islamist extremists were bombing three luxury hotels and three churches in the April Sunday attacks, which caused tourist arrivals to drop 18 percent from a year earlier in 2019. The drop, however, had improved to 4.5 percent from a 70.8 percent drop in May by December.

Sri Lanka has now decided to pursue a target-based plan to drive tourism revenue from 4.4 billion rupees in 2018 to 10 billion US dollars in 2025 by removing unnecessary regulatory barriers that hinder the sector's expansion.

OSL Take: Sri Lanka’s tourism industry is one of the fastest-growing economic sectors in the country. The continuous growth in tourist arrivals to the country and the interest shown by international brands to open hotels in the island are further indications of a continuously expanding industry. Sri Lanka also figures as a must-visit destination in globally renowned travel publications. All this has resulted in the expansion of business/investment opportunities in Sri Lanka’s tourism industry.

Sri Lanka also listed as a must-visit destination by many globally renowned travel publications resulting in a steady growth of tourists to the island. All these have resulted in the expansion of business/investment opportunities in Sri Lanka’s tourism industry. The government of Sri Lanka has also earmarked several large scale projects in the industry. Foreign businesses/investorscould therefore confidently explore business opportunities in Sri Lanka’stourism industry.

 VBS/AT/20200302/Z_TB3