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Launch of Special Line of Credit for Tourism Stakeholders #543769
07/29/20 05:08 AM
07/29/20 05:08 AM
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Virtual press conference today at 10am

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Re: Launch of Special Line of Credit for Tourism Stakeholders [Re: Marty] #543778
07/29/20 10:19 AM
07/29/20 10:19 AM
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Launch of Special Line of Credit for Tourism Stakeholders || July 29th, 2020

Here's the press conference live...


Re: Launch of Special Line of Credit for Tourism Stakeholders [Re: Marty] #543784
07/29/20 06:53 PM
07/29/20 06:53 PM
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The Government of Belize is offering a special loan program to assist the recovery of the tourism sector, which took a considerable economic blow due to the pandemic.

Prime Minister Dean Barrow announced the program today during a virtual press conference in partnership with the Development Finance Corporation (DFC).

The interest rate would have been 8 percent, but the DFC restructured and brought it down to 7 percent, while GOB has pledged to subsidize another 1 percent. Financial Secretary, Joseph Waight, will explain the funding to ensure that tourism stakeholders get the loans at a 6 percent.

The Reporter

Re: Launch of Special Line of Credit for Tourism Stakeholders [Re: Marty] #543788
07/30/20 04:48 AM
07/30/20 04:48 AM
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GOB Subsidizes Low Interest Loans For Tourism Sector

The Prime Minister today held a virtual press conference to announce 10 million dollars in (relatively) low interest financing for tourism stakeholders. It's a special line of credit which will be administered by the Development Finance Corporation. Special because of the low interest rate of 6% - but even more special because government is subsidising 1% of the interest - to the tune of 100 thousand dollars.

That's to make the credit as cheap as possible to this vital industry that has been flatlined by the COVID - 19 pandemic.

And what also makes it special is that the loans can be used for working capital - meaning to pay regular overhead expenses. The General Manager of the DFC explained what the funds can be used for, and who is eligible:

Natalie Goff, General Manager, DFC
"What is working capital? working capital are funds that you use for things like salaries, maintenance, in this era of Covid - health and safety standards - anything that's a recurring expense and who will be eligible for this programme? Belizean nationals, residents or non-nationals or any locally registered entity with no less than fifty-one percent Belizean ownership; however, considering that in the tourism sector we do have non-nationals who are employing Belizeans and generating foreign exchange for the country, those will also be considered on a case by case basis. The credit will be made directly to the tourism sector and all businesses, not only hoteliers, but they must have been operational prior to COVID. The whole purpose of the program is to maintain economic activity and aid in recovery. Business will be required to retain a minimum of 30% of their workforce. We would prefer a higher amount, but at least 30% depending on the scale of the business and the type of operations. The maximum loan size this time we are looking at is one million dollars. If we have too many of those, the money will go. So those will be minimal, but that will be the absolute maximum loan size. The loan payment will be determine based on the projected cash flow. However, we are at this time giving a maximum of 5 years including a one year grace period on payment of principal and interest. We are living in lean times and everybody have to run a lean operation and these loans will be monitored to ensure that 1) we have to ensure recovery. We don't want a situation where we end up 5 years from now and we have 10 million dollars that is not repaid to the organization."

Only loans of above one hundred thousand dollars will require property as collateral.

Special Consideration For Those Who Use Loans For Payroll

And, a key component of the financing is that it must have the widest trickle down effect on the economy - meaning that a percentage of the monies borrowed should go to paying wages of tourism workers - thereby giving the government relief in the COVID unemployment relief program. Goff explained:

Jules Vasquez, reporter
"Will there be a condition affixed that persons who received these loans should try and retain their staff?"

Natalie Goff, General Manager, DFC
"They will have to retain at least 30%. Now this was debated among the management staff because we thought 50%, because the more they retain, the less burden it will be on the state. However, at the same time we wanted to be as flexible as possible, so probably those who are able to retain more, maybe be looked at in a more favorable manner."

Loan Applications Go Live On Monday

Those tourism stakeholders that are pursuing the BTB's Tourism Gold Standard Certificate of Recognition while also be viewed more favourably, since they are getting ready to start back up.

Now, the program goes live at DFC offices countrywide on Monday, August third and they will be awarded based on repayability, but also on who applies first:

Natalie Goff, General Manager, DFC
"The loans will be entertained on a first come, first basis. However, what we are looking at, this is new, the situation is fluid and we will have to even make amendments as we go along. But what we are hoping that we will give at least a month. We are hoping that a month or maybe that's too long for applications to come in, so that if the demand for this type of loan way exceeds what we have allocated then we can make go to our financial institutions and show them where there is the demand, there's the need and justify another amount. So we are saying if we hold it and say the demand is 20 million dollars, we will know that we have to start negotiations or going to our other IFS's."

Implicit Risk Assumed By DFC with Tourism Loans

And while - for better or worse - tourism is the bedrock of the Belizean economy - in a time like this, lending money to this sector is far from a sure thing. Risk is intrinsic to this lending - and Goff said that's what development banks must do right now:

Reporter
"Is there any guarantee made to the DFC that you will not lose out on this 10 million dollars once put on the table and made available as credit. Is there any sort of guarantee or are we playing it by the air and we'll see what happens?"

Natalie Goff, General Manager, DFC
"While I would love a guarantee, I don't think there is any such thing in this time. And so what you are asking you probably have to go to the good Lord above to get that sort of guarantee, but we are not playing it by air. We are doing our due diligence as I mentioned those who will benefit will be those who were in good financial standing prior to Covid and that is how we mitigate risk, but we are a financial institution and financial institutions take risks."

Channel 7


Re: Launch of Special Line of Credit for Tourism Stakeholders [Re: Marty] #543847
08/01/20 06:07 AM
08/01/20 06:07 AM
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DFC TOURISM SECTOR RECOVERY LOANS

DFC, helping Belize and our Tourism stakeholders through challenging times.
Learn more: https://bit.ly/DFC_Tourism_Recovery_Loans

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