Tourism Finance Corporation (TFC) has restructured Sh634 million loans and allowed a 12 to 24-month moratorium to hospitality facilities hard-hit by the Covid-19 pandemic.
Managing director Jonah Orumoi said 17 projects developed in the past two years were among establishments benefiting, with TFC foregoing earnings and repayment of principal amounts, being about 10 per cent in value of the entire portfolio plus interest.
“We charge 9.5 per cent interest for all our loans and are considering lowering this below the Central Bank Rate to cushion the hotels from the evident income loss that has seen many send workers home and close down,” he said.
Mr Orumoi said TFC was introducing new financial products that would shield hotel and restaurant operators from reduced revenues including Local Purchase Order financing and invoice discounting.
He said most facilities would have to redesign and renovate facilities to accommodate larger spaces, corridors as well as introduce new entry and exit points.
“All tourism facilities must also retrain their workers to boost the confidence of incoming tourists that health and sanitation standards are at their highest level.
“Our focus is on helping hotels tap into domestic tourism that provides an instant income revenue source,” said Mr Orumoi.
He said the board resolved to render a moratorium to give the facilities time to recover while providing advice to operators that would see them continue operations and sustain jobs.
The TFC is also in talks with other financiers to provide guarantee funds to help ease the credit risk that would see local banks release the money to tourism establishments.
Earlier, Mr Orumoi said they had initiated talks with local banks seeking loan restructuring deals for hotel operators before it releases the Sh2 billion tourism stimulus package.
“We want an assurance that banks will release the money to hotels and restaurants, among other players that benefit from this money,” he said.
In 2019, Sh163 billion was realised as revenues from tourism but the earnings could suffer severely due to the Covid-19 pandemic that has seen international flights suspended and all establishments closed to curb the spread of the coronavirus.
Kenya has also imposed a curfew as well as issued cessation orders for its key tourist cities of Nairobi and Mombasa.
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