For tourism, government will look for concessionary donor funds

Published on : Monday, May 10, 2021

For tourism, the Government is working hard on protecting concessionary multilateral funding.

Last Thursday, a new lifeline for tourism has come up for discussion with Gotabaya Rajapaksa, the President of Sri Lanka, during the meeting to evaluate the progress of the industry with Tourism Minister Prasanna Ranatunga.

During the discussions it was disclosed that tourism’s debt moratorium has been estimated at over Rs. 350 billion will get over in August.

With the Central Bank informing the Tourism Ministry that the continuing moratorium cannot be extended any more further than September. It was advised to look for new facility for funding either from the World Bank or the Asian Development Bank. Of these loans, the interest component is estimated at over Rs. 100 billion.

Moreover, at 4% interest rate, tourism has received concessionary working capital as well as part of the Saubagya COVID-19 renaissance facility.

For these loans, the grace period was extended till 30 September given the continuous crisis encountered by businesses as well as individuals associated with tourism due to the pandemic.

As per the 2020 Annual Report in the middle of the debt moratorium granted to the industries related to tourism and other measures like special concessional loan schemes to help the businesses impacted by pandemic, credit to the Tourism sub-sector expanded by 11% or Rs. 26 billion to Rs. 261.7 billion from Rs. 235 billion in 2019.

At the end of 2020, the banking sector exposure to tourism was stated at Rs. 331.2 billion or 3.6% of the total according to the 2020 Central Bank Annual Report. The Non-Performing Ratio of the sector was 6.8%.

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