Travel Agents Want Govt to Introduce Loan Relief Measures to Cushion the Sector
The Kenya Association of Travel Agents (KATA) has urged the government to issue new guidelines to banks to offer moratoriums on loan interests by travel agents. KATA Chairman Mohammed Wanyoike said the players have experienced cash flow challenges occasioned by restrictions following the COVID-19 pandemic, particularly lockdowns that restrict travel and hampers tourism.
"This will give travel agents the much-needed cushioning from large-scale loan defaults, negative credit rating and risk profiling, even as they strategize on new ways to balance off their books," said Wanyoike. According to Wanyoike, the players were banking on the Easter bookings to improve their businesses but the COVID-19 protocols announced by President Uhuru Kenyatta last month have affected business.
As such, the industry players say they now need continued financial support to help weather the extended business dry spell. KATA's statement comes after the Central Bank of Kenya Governor Patrick Njoroge in late March said it may consider re-introducing loan repayments schemes for borrowers should the situation worsen.
Restructuring of loans was among the emergency measures that the CBK announced in March 2020 to mitigate the adverse economic effects on bank borrowers from the coronavirus pandemic. However, bank borrowers in the country were to regularize their repayment installments after the Central Bank of Kenya announced the expiry of emergency measures on the restructuring of loans.
"We need a framework of coordination of travel restrictions that will not kill the travel businesses in Kenya, which includes a common criterion that seeks to facilitate continued travel rather than impede it," Wanyoike said.
KATA represents over 200 travel agency businesses with a workforce of 15,000 Kenyans. 98 percernt of KATA's membership base are SMEs.
