Gov’t offers interest-free, no-collateral loans to tourism MSMEs

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Metro Manila (CNN Philippines, October 12) — The Department of Tourism (DOT) and the Small Business Corporation (SB Corp.) signed on Monday a memorandum of agreement for a ₱6-billion program that will extend loan assistance to tourism businesses.

Under the “CARES for Tourism Rehabilitation and Vitalization of Enterprises and Livelihood (TRAVEL)” program, micro, small, and medium enterprises from the tourism industry will have access to zero interest, no-collateral loans, the DOT said.

The loan term period runs to up to four years, including a grace period of up to a year.

According to the department, businesses which will borrow money will only have to pay a one-time service fee, which is set at a maximum of eight percent for a four-year loan.

Tourism Secretary Bernadette Romulo-Puyat said the DOT is hopeful that this initiative will help speed up the recovery of the country’s tourism industry, which had been brought to a standstill by the COVID-19 crisis.

“Aside from rescaling, rebooting, and making some sort of whole industry pivot, we also recognize the need for tourism MSMEs to have access to financial assistance or funds just to tide them over the present pandemic crisis,” she said.

“By working together, we can hopefully bring tourism, an industry that contributed 12.7% to the country’s 2019 GDP, back to its glory days,” Puyat added.

All loan applications of MSMEs accredited by the DOT and by local government units will be reviewed and processed by the SB Corp., which will also decide on the loanable amount and terms.

Funds for the loan assistance will be sourced from the budget allocated to the SB Corp’s CARES program under the Bayanihan 2 law.