Uganda Investment Authority through the Presidential Investors Round Table (PIRT) Tourism Technical Working Group VI was part of the preliminary discussion task force behind this credit facility.
Uganda Development Bank (UDB) in partnership with European Union (EU) has allocated funds in form of a grant attached to a loan (also known as ‘facility’) to enable the sector soar through the hardship of COVID19. The facility seeks to stimulate businesses operating in the tourism sector, which has been heavily impacted by COVID-19 by providing a grant and soft loan with flexible terms aligned to the current needs
of the sector. A total approximate pool of UGX 61.8 Billion (UGX 40Bn UDB loan plus UGX 21.8Bn EU Grant) has been set aside for this intervention. The EU grant is subject to the signing of an agreement between EU and UDB.
The facility will have the following components and additional benefits:
- A non-repayable grant attached to
the loan based on the number of staff maintained in the company during the two years’ period that will benefit from this intervention in comparison with the number of staff in the company before COVID-19 pandemic (28th February 2020).
- Concessional loan interest rates not exceeding 12%; however, the effective cost of the facility to the borrower shall not exceed 8%.
- Extended working capital loan tenor of up to 5 years inclusive of a 2 years’ grace period.
- Business advisory services as a non- monetary intervention.
Business entities under Uganda Hotel Owners Association (UHOA) and Association of Uganda Tour Operators (AUTO) shall benefit from the facility.
Interested firms must meet the following criteria to be considered eligible.
- Must be a fully subscribed member of Uganda Hotels Owners’ Association – UHOA or Association of Uganda Tour Operators – AUTO as at 31st December 2019;
- The applicant must be a registered business in Uganda in form of
a company, an association or a cooperative;
- The applicant must have a good credit record backed by a Credit Reference Bureau Report (CRB). A good record could include but is not limited to; no adverse reports from banks, no bounced cheques and/or no overdue loans;
- The applicant must have audited financial accounts for at least the last 2 financial years (i.e. 2018 and 2019) prior to the COVID-19 outbreak to confirm existence of operations;
- The applicant must have been offering gainful employment to at least 5 people for at least six months before the COVID-19 outbreak (i.e. 28th February
2020) based on the PAYE contributions paid to URA and the Social Security contributions paid to NSSF;
f. The applicant must be able to retain at least 75% of the employees employed prior to the COVID 19 outbreak (28th February 2020). The applicant should demonstrate that the retained staff will be paid at least 50% of their gross salary inclusive of all the statutory obligations during the two years’ period that will benefit from this facility;
g. The applicant must comply with all statutory requirements like Local Council trading licenses, NSSF, PAYE
and other URA tax obligations where applicable for the current financial year, i.e. January 2020 to June 2020;
h. An entity and its sister organizations can only apply for and access one facility.
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