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UDB, EU launch Shs 62bn soft loans facility for tourism

The Uganda Development Bank (UDB) and European Union (EU) have launched Shs 62 billion soft loan and grants kitty for tourism sector players to fast track post Covid-19 recovery.

The total facility is made up of Shs 40 billion from UDB and Shs 21.8 billion grant from the European Union. Under this facility, only customers that qualify for the loan will be eligible for the grant. The eligible players will receive a maximum of Shs 1 billion in grants and soft loans with flexible terms aligned to the current needs of the sector.

The facility offers a low interest repayable within a five-year period with a two-year grace period. UDB will also provide business advisory services under the Business Accelerator for Successful Entrepreneurship (BASE) to assist intending applicants meet the criteria for the application.

A complementary environmental assessment by a certified organization will also be offered to successful applicants to facilitate the improvement of their environmental footprint through among others; better waste management and renewable energy sources.

This program was designed in 2020 in partnership with key stakeholders in the sector to respond to the Covid-19 pandemic and its impact on businesses operating in the tourism and hospitality industry. The first call was successfully completed and a total of 44 hotels and tour operators benefited from the facility.

Patricia Ojangole the managing director of UDB said; “At the onset of the Covid-19 pandemic, Uganda like other countries, sanctioned travel restrictions within and out of the country. The travel restrictions and standard operating procedures contributed to a severe contraction of business opportunities and viability of businesses resulting in closure for some and eventual loss of jobs. This facility is targeting the recovery of these businesses as they take advantage of growing tourist traffic both local and foreign,”

“The call is open to legally registered businesses that have been in operation for at least two years. Additionally, applicants must demonstrate that their businesses will be able to retain their employees during the period of the loan,” Ojangole said.

“For this second call, a lenient criterion has been adapted to better meet the needs of the sector today, like incorporating the list of eligible expenditures the companies initiated to make tourism establishments more environmentally friendly. This could include investments aiming at improving waste management, promoting the use of alternative sources of energy, and going digital among others. Indeed, the EU is committed to supporting the tourism sector in Uganda to ensure many more people from all over the world come and visit this beautiful and amazing country,” Caroline Adriaensen, EU Head of Cooperation said.

She said the EU is committed to supporting the tourism sector to ensure more people from all over the world come and visit.

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