Investors in hospitality sector press for reduced loan rates
By Kennedy Gachuhi | June 8th 2020
Investors in the hospitality sector have asked the Tourism Finance Corporation (TFC) to lower interest on loans it advances to them.
The investors drawn from Central Rift Region are specifically targeting the Sh5.6 billion kitty being held by TFC for lending to players in the tourism industry.
Through their lobby, the Rift Valley Lakes Tourism Association, they complained that the current rates are too high and do not reflect the hard realities borne of the Covid-19 pandemic.
"TFC is currently charging interest rates of 11 per cent annually. We are appealing to the corporation to review this rate to 7 per cent on loans disbursed to hoteliers on reducing balance basis,” Joseph Muya, the association's spokesperson said yesterday.
The investors include hotel developers on properties around the Rift Valley lakes such as Nakuru, Naivasha, Elementaita, Baringo and Bogoria.
“Most of our clients are international tourists whose visits were cancelled when the Kenyan airspace was closed. Conferences and meetings were cancelled or postponed leaving us financially grounded,” said Mr Muya.
The lobby further called on the corporation to work out a friendlier formula for repayment of previous loans.“TFC can extend the loan repayment period or give us a longer grace period. This will allow our businesses to remain afloat and save many jobs,” Muya said.
Tourism Cabinet Secretary Najib Balala has said that the Sh5.6 billion stimulus package will be extended to hotels, airlines and tour guide companies.
This will aid them in restructuring their operations and renovating their facilities. “The tourism and hospitality sector is likely to get back on its feet by mid next year. There will be minimal or no revenue for the businesses for the second half of 2020. Increased layoffs are inevitable without affordable government support,” Muya said.
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