Sri Lanka adds new regulation to credit access of tourism business

ECONOMYNEXT – Sri Lanka’s central bank has directed finance companies not to give loans to borrowers in tourism related businesses unless they have a license, Sri Lanka Tourism Development Authority said.

The central bank has written to the Finance Houses Association Sri Lanka saying it is mandatory for all tourism related businesses to register with the Sri Lanka Tourism Development Authority under Tourism Act No 38 of 2005.

"The SLTDA has also had discussions with the Central Bank to ensure that the commercial banks too consider the SLTDA license as a pre-requisite for granting loans to tourism related businesses," the regulator said.

The requirement to get registration for getting loans will add yet another barrier to getting access to credit for small businesses in particular.

The mounting regulations under the current United National Party led administration comes as the country is trying to improve ease of doing business and reduce time and steps in starting and running businesses.

Sri Lanka had earlier gazetted a set of state-mandated requirements for graded hotels in an era where booking engines were making facilities transparent.

However the tourism regulator said it had also launched Online Tourism Business Licensing System (OTBLS) to make it easier for entrepreneurs to get past the regulatory barrier.

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