March 3, 2024, Sunday
Nepal 1:37:26 pm

HAN urges govt to extend deadline for repayment of loans

The Nepal Weekly
October 18, 2022

The Hotel Association Nepal (HAN) has asked the government to extend the deadline for the repayment of principal and interest taken by hoteliers from banks. Stating that many businesses are running at less than half their capacity and are not in a position to repay their loans at present, HAN has urged the government to extend the deadline by at least two years and provide the facility of rescheduling and refinancing.

In a press statement issued on Monday, HAN has stated that the hotel and tourism industry is still facing difficulties in sustaining their business and are operating at a loss on a daily basis due to the decline in tourist inflow, although the situation is slightly better than in the past two years COV- ID-19. Although efforts are being made to increase the number of tourists to 500,000 this year, businesses are facing difficulties in even running at half capacity.

“The effects of the ongoing war between Russia and Ukraine just as the COVID-19 cases were dropping and the rapidly spreading dengue outbreak in Nepal has impacted tourism. In addition, the upcoming election is sure to indirectly reduce tourism arrivals and activities. The most complicated problem is the increasing interest rates of the bank and the urgent need to pay them within the set deadline. At present, even though we are responsible for paying the instalments of the loan and the interest, we are in no position to pay the interest under any circumstances.

We request the government to extend the deadline for paying the interest by at least two years and provide a facility for rescheduling and refinancing,” it reads.

HAN has also requested some of the service facilities adopted by the monetary policy during COVID-19 to be continued in the present as the increasing interest rates applied by the banks are too high for a sensitive industry like hotels. The association has also demanded that the interest rates be slashed to single digit and that investment be encouraged in the sector.

According to the statement, the hoteliers of Pokhara and Siddharthnagar have publicly announced their inability to pay the banks’ interest by October 18.

As per HAN, hoteliers from other parts of the country are also faced with a similar situation. If the above issues are not addressed by the state immediately, the hotels will be forced to close down gradually due to their inability to clear their credit with the banks.