Georgia continues to subsidise pre-existing loans of companies in hotel industry

The Georgian government will continue subsidising pre-existing bank loans for companies in the hotel industry over the next six months, said PM Giorgi Gakharia earlier today.

At first the programme was supposed to continue for three months. Then the programme was extended for an additional three months. 

Gakharia commented on the new expansion of the programme for the next six months and said:

This is the only opportunity to stand by the sector, because although economic indicators are cautiously optimistic, the tourism sector is still under pressure, so we must do everything we can to help this sector," said Gakharia.

Under the programme, Enterprise Georgia is co-financing the servicing of loans of family-owned, small and medium-size hotels from commercial banks.

About 10 million GEL has been spent to co-finance the loans of 850 small hotels in the framework of the first phase of the coronavirus anti-crisis plan.

All companies will have the opportunity to participate in the additional six-month component, even if it has not yet participated in this programme yet. This gives small hotels the opportunity to become beneficiaries of this programme. This is extremely important to help the sector and keep jobs," Gakharia said.

The companies that have not been able to become beneficiaries of this programme during the last six months will have the opportunity to be involved in the programme for the next six months starting September 10.

What are the conditions for participating in the programme?

To participate in the programme, hotel loans must have been taken out before March 1, 2020, and should have been taken for the purpose of building, expanding or reconstructing a hotel.

Also, hotels must have in between four and 50 rooms.

Enterprise Georgia will co-finance no more than 80 per cent of the interest rate on loans denominated in the national currency, while it will finance no more than 70 per cent in case of the loans denominated in foreign currency, particularly in the US dollar or the euro.

The maximum amount of loans that will be eligible is 1,000,000 GEL for loans denominated in the Georgian lari, while the maximum amount is $300,000 or €250,000 in case of loans denominated in foreign currency.