Logo of Phnom Penh Post newspaper Phnom Penh Post - $150M tourism loan scheme’s rules set

$150M tourism loan scheme’s rules set

Content image - Phnom Penh Post
Foreign visitors on a boat trip along the Chaktomuk River in front of the Royal Palace in January. Hong Menea

$150M tourism loan scheme’s rules set

The lending rules and procedures of the recently-launched $150 million Tourism Recovery Co-Financing Scheme (TRCS) were officially established on July 1, in a move to boost recovery in the Covid-hammered industry, according to a tourism ministry letter issued on the same day.

The TRCS was rolled out on May 17 to provide a lifeline for businesses involved in the tourism value chain that are deemed to have been significantly impacted by the Covid-19 crisis, and is currently implemented with the support of 19 participating financial institutions (PFI).

The scheme was financed by a counterpart fund between the government and financial institutions, with $75 million of the national budget to be disbursed in the form of loans issued by state-run Small and Medium-sized Enterprise Bank of Cambodia Plc (SME Bank), and the other $75 million through loans made via the PFIs, which comprise commercial banks and microfinance institutions (MFI).

Key offerings of the TRCS include a maximum interest rate of 6.5 per cent per annum, a 16-month grace period on principal payments, loan term of up to seven years, loan amount of up to $400,000, and the option of receiving funds in either riel or US dollars, according to a July 1 notification letter addressed to tourism industry bodies and business owners in Cambodia.

The letter instructed business owners to apply at PFIs for loans under the TRCS, “for the purpose of restoring business operations, or expansions or diversification of tourism services, to be ready to receive national and international tourists”, and noted that financing would be provided on a first-come-first-served basis until funds are exhausted.

Cambodia Association of Travel Agents (CATA) president Chhay Sivlin told The Post on July 3 that the move comes timely as the tourism sector gears up from a sizeable uptick in foreign travellers expected from October.

However, she argued, obtaining loans from the TRCS will not be a walk-in-the-park, especially for businesses without adequate collateral, which she noted would be required to purchase credit guarantees from the Credit Guarantee Corporation of Cambodia Plc (CGCC) for a pretty penny.

Regardless, Sivlin believes that the scheme will have a considerable number of takers as more foreign holidaymakers book trips to and across Cambodia, and create multiple tailwinds to support a long-awaited recovery in the ailing tourism sector after more than two years of Covid blows.

CGCC deputy director-general No Lida previously noted that eligible businesses can obtain a Letter of Guarantee (LG) by contacting the institution where they applied for the loan, which will in turn request the LG from the CGCC.

The tourism ministry listed the 19 current PFIs as Chip Mong Commercial Bank Plc, Hattha Bank Plc, ACLEDA Bank Plc, Advanced Bank of Asia Ltd (ABA), Sathapana Bank Plc, Cambodia Post Bank Plc (CP Bank), Wing Bank (Cambodia) Plc, Prince Bank Plc, Canadia Bank Plc, Phillip Bank Plc, Asia-Pacific Development Bank Plc (APD Bank), Phnom Penh Commercial Bank Plc, CIMB Bank Plc, Saigon Thuong Tin Bank (Cambodia) Plc (Sacombank Cambodia), RHB Bank (Cambodia) Plc, Foreign Trade Bank of Cambodia (FTB), LOLC (Cambodia) Plc, Prasac Microfinance Institution Plc and CAMMA Microfinance Ltd.

MOST VIEWED

  • Angkor lifetime pass, special Siem Reap travel offers planned

    The Ministry of Tourism plans to introduce a convenient, single lifetime pass for foreign travellers to visit Angkor Archaeological Park and potentially other areas. The move is designed to stimulate tourism to the culturally rich province of Siem Reap as the start of the “Visit

  • Ice cream, noodles flagged over carcinogen

    The General Department of Customs and Excise of Cambodia (GDCE) has identified three types of instant noodles and ice cream trademarks originating from Thailand, Vietnam and France that are suspected to contain ethylene oxide, which poses a cancer risk to consumers. The general department has

  • Exclusive interview with Josep Borrell Fontelles, High Representative of the EU

    CAMBODIA is hosting the 55th ASEAN Foreign Ministers’ Meeting (AMM) and Related Meetings this week with top officials from the US, China, and Russia and other countries in the region slated to attend and to meet with face-to-face with their counterparts on the sidelines. In

  • Rise in Thai air routes to Siem Reap fuels travel hopes

    Local tourism industry players are eager for regional airline Bangkok Airways Pcl’s resumption of direct flight services between the Thai capital and Siem Reap town on August 1 – home of Cambodia’s awe-inspiring Angkor Archaeological Park – which is expected to boost the growth rate of

  • ASEAN Foreign Ministers’ meet commences, Taiwan issue possibly on table

    The 55th ASEAN Foreign Ministers’ Meeting (AMM) and related meetings hosted by Cambodia kicks off in Phnom Penh on August 3, with progress, challenges, and the way forward for the ASEAN Community-building on the table. Issues on Taiwan, sparked by the visit of US House Speaker

  • Recap of this year’s ASEAN FM meet and look ahead

    This year’s edition of the ASEAN Foreign Ministers’ Meeting (AMM) hosted by Cambodia comes against the backdrop of heightened global tensions and increasing rivalry between major powers that have been compared to the animosity of the Cold War era. The following is The Post’