Thiruvananthapuram: The Kerala Government is planning to introduce a new lending scheme in order to rescue the tourism sector which is facing a severe crisis following the outbreak of the COVID-19 pandemic. Under the new scheme, a total amount of Rs 100 crore would be distributed as loans among small and medium entrepreneurs in the state’s tourism sector at a low-interest rate of 3 per cent.
To implement the scheme, the government will be borrowing money at an interest rate of 9 per cent from the Kerala Bank and subsidising 6 per cent interest so that the entrepreneurs are benefited. The proposal for the scheme prepared by the Tourism Department is now awaiting the nod of the Chief Minister and Finance Department. The Tourism Department has also decided to offer a guarantee for the money lent. The scheme is expected to cost the state government Rs 6 crore and it has been suggested that this money could be sourced from the Plan fund of the Tourism Department.
At present, banks charge an interest rate of over 10 per cent on loans given to investors in the tourism sector. Moreover, financial institutions have been reluctant to lend money to the travel industry after COVID-19 wreaked havoc. It is also pointed out that the Central government’s stimulus economic package carried no proposals for the tourism sector.
Tourism is among the sectors most affected by the pandemic and numerous jobs have been lost. Moreover, cash-strapped entrepreneurs are struggling to pay the employees they have retained. Several small and medium investors have even abandoned their involvement in the tourism sector and instead are focusing on ventures like fish stalls, juice shops, and barbershops.
Before restrictions were imposed in view of the pandemic, Kerala’s average monthly revenue from tourism was around Rs 4,000 crore. With activities stalled for four months now, the total loss has been pegged at Rs 16,000 crore and the situation is unlikely to improve for another four months.