THASL urges Govt. to underwrite working capital loans for terror-hit tourism sector SMEs

Tourist Hotels Association of Sri Lanka (THASL) is urging the Government to underwrite critically needed working capital loans for the tourism sector, especially to the small and medium sector seriously impacted by the Easter Sunday terror attacks.  "As an industry, taking stock of the situation with no immediate turn around in sight, we urge the Government to underwrite working capital loans amounting to Rs. 12 billion to meet monthly salaries, employee benefits and utilities for a period of one year as most private banks and some State banks are reluctant to risk capital payments of these loans, especially to the SME sector," THASL President Sanath Ukwatte said.  

He said that last year, the tourism industry brought $ 4.5 billion to the country’s coffer while, both directly and indirectly, employing over 500,000 people. With an average household of four, it sums to two million dependents.

Quoting Central Bank data, Ukwatte said the tourism industry is the second highest contributor of net foreign exchange earnings in the country, just below foreign remittances, and its contribution to the national economy is around 6.6%."The industry was performing well and it was on the path to reaching the $ 5 billion mark this year. The Easter Sunday terrorist attacks halted industry growth, and recovery will depend on how well the industry manages international PR from now on. Tourism in Sri Lanka is mainly private sector-owned with huge capital investments by both local and foreign investors. 

The industry has created a large number of job opportunities for youth and women across the country," the THASL chief said.

 “We are also one of the highest taxpaying industries in the country. One of the unique features in our industry is that people of every strata of society can benefit from tourism, and they have the chance to earn dollars. We were on the path for a record earning this year," he said.

"However, today we are faced with this crisis due to a breach of security which we had no control over. Hotels were directly targeted, and to erase that fear of security from the international traveller will take time. Traveller safety and security is a significant consideration in today’s travel. We need to look at stabilising livelihoods of hundreds of thousands of people whose only source of income is tourism. Their service charge, which at times is more than the salary, is non-existent today. We urge the Government to grant us this facility without any further delay,” THASL President Ukwatte emphasised.

It was also pointed out that the Government has access to multilateral funding agencies who are looking at the tourism industry very sympathetically. "These agencies can support the country at a critical time like this. Our industry consists largely of small and medium enterprises. Most of their businesses today are making operational losses," he said.

"We also understand that the ADB-funded credit guarantee scheme is yet to be finalised. If the Government can expedite this, then it will take a lot of pressure off, especially off the SMEs; and since it comes with concessionary terms, these companies will be able to service the loans easily once the business picks up,” THASL President Ukwatte stressed.