Sri Lanka to track tourism businesses to ensure fast recovery from bombings

ECONOMYNEXT – Sri Lanka’s government will track selected tourism businesses to ensure fast recovery from April’s suicide bombings that hit the industry hard with banks considering a moratorium on 26 billion rupees of loans, an official said.

Non-Cabinet Minister of Public Distribution and Economic Reforms Harsha De Silva said the total exposure of banks to the tourism sector hit hard by suicide bombings of churches and hotels was 62 billion rupees.

“Of this amount, by end-May 26 billion rupees of loans are being evaluated under the moratorium on payments arranged by government as part of its relief package to the tourism industry,” he told a news conference.

According to central bank data up to 31 May 2019, the commercial banks had got requests for relief from 1,055 borrowers and the total exposure of 62 billion rupees could also be considered for the moratorium eventually, he said.

The relief was arranged by government to help revive the tourism industry after Easter Sunday’s suicide bombings of three churches and hotels which killed over 250 people, including tourists.

”We hope to have a panel – a sample of different tourism related entities and we will track them so we will know how fast they are recovering,” De Silva said.

“That way we will be able to estimate any delays so we can make policy changes – and not wait for end of quarter results to come.

“Instead we will be proactive to follow the industry and see where the problems are.”

Under the relief package, tourism sector businesses could also get working capital loans but data on this was not immediately available.

Minister of Tourism Development, Wildlife & Christian Religious Affairs John Amaratunga said the two big state banks, Bank of Ceylon and People’s Bank, had responded fast to the government request to give relief to the beleaguered tourism businesses.

A Bank of Ceylon official said they had got 1,100 applications worth eight billion rupees to be considered for the moratorium while a People’s Bank official said they had got 1,000 applications which were being evaluated.

But some private banks and leasing companies seemed slow to respond, Amaratunga said.

De Silva said banks have to evaluate applications “loan by loan”, hence the possible delays.

“Private banks seem to be better than state banks. The data does not suggest private banks are a little reluctant.”

De Silva said the government had adopted a dynamic approach to solve the problems of tourism businesses affected by the bombings and subsequent drop in arrivals and was monitoring the sector regularly.

“We need to find out whose applications have been rejected and reasons for rejection,” he said.
 
Tourism businesses are also eligible for working capital loans of 2.5 million rupees to 250 million rupees.

Amaratunga said the fee of 25,000 rupees to register for the relief package had been waived for three months and provisional registration was being given to affected businesses.

“Anyone can register – there are no fees.”

De Silva said the government was also studying the impact at small and micro business level and had asked the census and statistics department to do a study “so we will know the extent of the impact without waiting for the year-end statistics.
 (COLOMBO, 14 June, 2019)