Homestay in the backwaters

TOURISM: A guest as god in god's own country "" courtesy loans for renovating homes for tourists.

It seems to be getting tougher for even the banking sector to stay away from Kerala's ever-expanding tourism challenges.

In a bid to have its share of the multi-flavoured tourism pie, the State Bank of Travancore, Kerala's own bank from the State Bank group stable, has taken the plunge to mark its presence in god's own travel destination.

With its new offering "" Homestay Tourism "" the bank is set to make the Kerala jaunt memorable for the backpacker. The homestay concept is currently hot in Kerala with locals chipping in to contribute to the tourism promotion efforts of the government.

House owners with extra space and home-cooked food to spare are increasingly letting rooms out for the tourist so that the guest gets a taste of living in a typical Kerala home. The state bank plans to break into this segment by offering loans to the individuals who wish to provide homestay facilities to back packers touring Kerala.

According to K Sitaramam, managing director, State Bank of Travancore, the purpose of the Homestay Tourism loan is to finance the construction of additional rooms, renovation and modernisation of existing homes and purchase of furniture and other equipment such as air-conditioners.

The loans would provide working capital for the entrepreneur. The Thiruvananthapuram-based bank is also mulling over talks with the department of tourism, Kerala, to include more value additions to this venture, added the official.

The Homestay Tourism loans would be made available to applicants based on the total project cost. The loans would be in the form of cash credit for working capital, term loan for acquisition of assets, lone-term investments and the like, or as a letter of credit.

The margin would be calculated at a minimum of 20 per cent and for second hand equipment it would be 40 per cent.

Homestay Tourism loans (up to a Rs 50-lakh limit) would carry 1 per cent below the bank's PLR, which translates to 10.50 per cent per annum currently. The loans could be repayable in 3-7 years, which includes the start-up period not exceeding 18 months.

With the Kerala tourism sector making progress with an annual turnover of around Rs 7,500 crore, state bank's new venture is sure to bring cheer to more entrepreneurs who look forward to contributing to the state's tourism kitty.