[Kenya] Tourism Finance Corporation introduces $8 million loan facility for hoteliers
Tourism Finance Corporation has set aside $8 million loan kitty for hoteliers to improve and upgrade their facilities, the state-owned agency said.
The loan facility, TFC said, will help in the recovery programmes for the industry, which has been battered by insecurity perceptions linked to militant group, al Shabab.
The agency, formerly Kenya Tourism Development Corporation, said the loans are priced at nine per cent.
“We will start lending in the current month. We want to support the industry again but we will be looking at innovative and eco-friendly projects in the industry,” managing director Jonah Orumoi said yesterday.
He spoke after TFC entered into a partnership with the UN-Habitat to promote energy and resource efficiency in the hospitality industry.
Lack of the kitty at the government’s main financial support organisation for the tourism industry had left hoteliers with no option but seek commercial banks loans at exorbitant rates, prior to the capping of the rates at four per cent above the Central Bank of Kenya rate, currently at 10 per cent.
This coupled with low earnings as a result of the tourism slump left hoteliers with limited recourses to renovate facilities. Lack of a substantial board was among hiccups that faced the parastatal, formerly the Kenya Tourism Development Corporation.
Tourist arrivals have remained low since 2013 due to insecurity concerns, blamed on the Al- shabaab militia who have been staging attacks in the country.
This led to issuance of travel advisories by western countries among them key markets of the US and UK. In 2014, at least 30 hotels closed down at the Coast alone with international arrivals dipping to 861,758 from 1.09 million in 2013 and 1.23 million arrivals in 2012.
The sector has however begun to pick after several interventions, including improves security by the government and marketing campaigns. Total international arrivals for January to December 2016 closed at 877,602 compared to 752,073 in 2015, a 16.7 per cent increase.
Orumoi said the corporation will support sector players including availing capital to support travel agency businesses. “Hotels will be assisted to refurbish,” he said.