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Revolving Fund is an irredeemable seed fund of KSh. 48 million managed on behalf of the government. The objective of the fund is to provide concession credit to entrepreneurs within the tourism sector. Loans are, therefore, given to new tourist enterprises at concessional rates of interests to assist the less experienced private sector investors.
(a) Development loans
KTDC provides development funds for new start-up hotels, lodges and other facilities. Most properties enjoy an equity element to reduce the impacts on lending costs on their viability and sustainability.
(b) Extension and modernization loans
Currently, many tourism facilities require rehabilitation and addition of facilities in order to meet guest demands. KTDC has continuously provided such funds at concessional terms. The destination Kenya remains competitive through this facility. In addition to the funds, the corporation provides business advisory services.
(c ) Aviation, tours and travel loans
Equity and loans funds are provided for purchase of cars and for working capital. KTDC is associated with the local airlines and a number of aviation activities. A number of tour and travel operators have benefited and continues to enjoy KTDC funding and business advisory services
(d) Business loans
Funding is extended for production and working capital for curio shops and export of handicrafts.
How to obtain a loan
KTDC is a development financial institution established by the Government of Kenya, main objectives are to develop Tourism and Tourism related enterprises. Under this jurisdiction, KTDC offers loans under our Commercial and Revolving Fund Programmes.
To qualify for our programme, the following is a run down of our basic requirements.
FEES
In order to defray costs related to the evaluation of your application, the following fees are payable to the Corporation:
Loan Application Fee
Loan application fee of Kshs 3,000/=. This fee is non-refundable. A loan application form will be issued only on payment of this fee. The completed form must be returned within thirty (30) days to the Corporation.
Loan Appraisal Fee
Appraisal fee of Kshs. 50,000/=. This fee is non-refundable and are utilized towards the costs related to the evaluation of the project, including a full, physical site visit.
Commitment Fee
This fee will be paid at a rate of 1% of the total amount borrowed after acceptance of the Loan Offer.
Other Fees
Legal fees, valuation fees and any other charges related to Management shall be payable directly to the respective third (3rd) party.
INTEREST RATES
15% - under the Commercial Loan Program
14% - under the Revolving Fund Program
Interest rates may be reviewed periodically by the Corporation to conform to contemporary economic fundamentals, as per the KTDC policies. Borrowers will be advised accordingly.
REPAYMENT PERIOD
Loans are payable over a maximum period of ten (10) years. Only those loans for the purchase of any and all motor vehicles are payable over a maximum period of three (3) years.
LEGAL INFORMATION
The Legal status of the applicant Company shall be required as follows:-
- Certificate of Incorporation
- Memorandum and Articles of Association
- Board Resolution to borrow
PROJECT INFORMATION
The applicant will:
- Furnish the Corporation with a detailed Feasibility Study Report
- The Feasibility Study Report, should provide adequate background information of all Directors of the Company including age, percentage share holding, occupation, education, experience and any other relevant information.
- Pledge adequate security for KTDC loan and furnish us with a copy of the title deed that must be free of all encumbrances. The security value should be at least 30% over and above the principal loan amount.
- Provide a letter authorizing the Corporation to commission its official valuers to prepare a report valuation of the pledged security. An undertaking to pay the valuation fees directly to the Corporation valuers should also be provided.
- Provide any management and, or marketing agreements executed by other companies providing clients to the business.
- Provide evidence of an Insurance cover of the pledged securities obtained from an insurance company approved by the Corporation. KTDC interest must endorsed thereon.
- Indicate current indebtedness of the Applicant Company and any additional information that may be considered necessary to assist in the evaluation an approval of the loan request.
- Provide details of the applicants equity participation that must not be less than 25%, of the total project costs.
- Provide bank statements, management and or audited accounts for at least the last three (3) years.
- An Environmental Impact Assessment, must be provided to the Corporation on submission of the feasibility study.
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