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Sri Lanka proposes new 5-year low interest loan for hotels, travel firms

ECONOMYNEXT – Sri Lanka’s cabinet of ministers had approved proposals to give concessionary loans for up to 5 years to the hotel and travel sector to pay salaries during a Coronavirus epidemic , the state information office said.

Hotels, destination management and travel agencies, registered with the Sri Lanka Tourism Development Authority would be allowed to get a 5-year loan at a 4 percent interest rate, to pay a 20,000 rupee salary for workers for up to 6 months.

The loan could be repaid in 5 years with a 2 year grace.

Tourism related firms registered with the SLTDA including restaurants, spas, wellness centres would be given a credit facility to pay salaries of up to 15,000 per worker for 6-months.

A 6-month moratorium for leases given for tourism sector vehicles would be extended for up to 12 months.

It was not clear whether there would be a government guarantee for the loans or who would provide funds for the loan.

Sri Lanka has proposed a Zimbabwe-style central bank-refinanced 150 billion rupee credit facility for banks to give Coronavirus credit relief, despite foreign exchange trouble and difficulties in repaying foreign loans.

Sri Lanka has slapped severe import controls hitting supply chains of many businesses adding to economic turmoil after the central bank printed money from March, forcing a soft-peg with the US dollar to break as budgets deteriorated.

Sri Lanka is planning to allow tourists to enter the country without mandatory quarantine from August 01. (Colombo/Jun11/2020)