The Uganda Development Bank Limited (UDB) in partnership with the European Union (EU) on Wednesday urged stakeholders in the tourism sector to apply for funds meant to boost the sector that was heavily affected by the Covid-19 pandemic.
Launching the Second Tourism Facility at Georgina Gardens Hotel, Lubya Hill in Kampala, Patricia Ojangole, the Managing Director of UDB, said the bank still holds Shs44bn that remained of the total Shs62bn that was set aside to revive the tourism industry from the covid-19 setback. She said the bank only disbursed Shs18bn.
She said of the Shs62bn, Shs40bn is ring-fenced funds from UDB which is complimented by a grant of Shs21.8bn from the European Union.
She said that under this facility, only customers that qualify for the loan will be eligible for the grant. She said the facility is intended to give operators access to working capital to fast track recovery post the Covid-19 effects and support initiatives to become more environmental friendly.
“Uganda like the other entire countries world over put in place travel restrictions within and out of the country at the onset of the Covid-Pandemic. These restrictions contributed to a severe contraction of the business opportunities resulting into loss of jobs. This facility is targeting the recovery of these businesses as they take advantage of the growing traffic in tourism both local and foreign,” Ojangole said.
She added that the flexible facility offers a low interest rate payable within five years with a two year grace period.
“This call is open for legally registered businesses that have been in operation for the last two years. Additionally, applicants must demonstrate that their businesses will be able to retain their employees during the period of the loan,” she added.
She said that they have now learnt many lessons from the first call, and that the challenges associated therein were addressed.
Samuel Maitum, the director for credit at UDB, said that the bank has also relaxed the terms and requirements of the applicants, having learnt from what has been disqualifying most of the applicants.
He said that in the first call, only 94 companies applied, of which 44 qualified and Shs18.2bn was disbursed to them. Caroline Adriaensen the head of Cooperation at the European Union in Uganda said that for this second call, a lenient criteria has been adapted to better meet the needs of the sector today like incorporating in the list of eligible expenditures the companies initiated to make tourism establishments more environmentally friendly like making investments aiming at improving waste management, promoting the use of alternative sources of energy and going digital.
She said that since the first phase 18 months ago, it has been a very serious ground-breaking operation because of its nature of involving the European Union.
She said the EU is committed to supporting the tourism sector in Uganda to ensure that many more people from all over the world come and visit this beautiful country. She added that the operations have been slow and unfavorable because they had to make sure that the combination of grant and loan works effectively.
“The new call is designed to fit in the context of the industry as of now since the Covid-19 pandemic is slowly being seen off,” she said.
At the same occasion, Martin Mugarra Bahinduka, the Minister of state for tourism, said that though some operators benefited from the first phase of the programme, the numbers are very few compared to the number of players in the sector.
He said there is need for more sensitization and awareness so that more members can be brought on board to benefit from this facility.
He added that if there are more relaxed conditions, this would help more people to benefit. Under this second call, qualifying businesses will receive a maximum of Shs1bn and a minimum of Shs100m.