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May 30, 2020

Immediate loan programme to ease economic impact of COVID-19 on industries

Since the outbreak of Covid-19, we have seen the negative repercussions of the spreading of the virus, and industries which employ large labour forces, as well as employees in the hotels and tourism sector and related businesses, are bearing the brunt of the Coronavirus outbreak.
To remedy the economic impacts caused by Coronavirus (COVID-19), CMP enterprises, hotels and tourism services, along with small and medium enterprises (SMEs), are designated as priority sectors that need assistance, and a COVID-19 Fund of Ks 100 billion has been set up by the Union Government to distribute loans to them.
The loans will be provided to enterprises that are included in the priority sector at an interest of 1% for a one-year period.
To effectively support these businesses, the departments concerned are collecting data, and the industries, including SMEs and hotels and tourism sectors, are advised to systematically report to the authorities to ensure that they get the amount of financial assistance they need for their businesses.
They should all understand that incomplete applications, or applications that do not meet the stated requirements, will not be accepted.
The criteria for businesses which are eligible to apply for loans are as follows.
(a) The business must be a citizen-owned enterprise that has actually been harmed by COVID-19
(b) It must be an operating enterprise or an enterprise that has temporarily halted operations for three months from the date of this announcement, but can start up operations as soon as it receives the loan
(c) An enterprise that received its work permit or license from the relevant department before 31 March, 2018
(d) An enterprise that had an annual income during the previous two years
(e) An enterprise that has favourable conditions to pay back the loan
(f) An enterprise that will use the loan money only in paying salaries of blue and white collar workers and operations
(g) As for a company, it shall not be the one that has been suspended or canceled from the company registration. As for a non-company, it shall not be the one that has been suspended or canceled from the registration by the relevant department or organization.
(h) An enterprise that has paid its income tax/commercial tax/special goods tax
(i) An enterprise that regularly contributes to the Social Security Fund
(j) As for a company, the board of directors, and for a non-company, the owner, shall act as the guarantor of the loan.

We believe that this action taken amid the Coronavirus outbreak would ease the economic impacts on industries, while providing some needed assistance.

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