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Tourist spot enjoys new funding channel in China

CCTV.com

05-10-2016 01:26 BJT

China has launched the country's first securitized tourist spot in an ethnic village in Yunnan Province. CCTV takes a look at the plan's risks and returns.
 
This ethnic village in southern China would never have connected to the outside world without tourism. The region's major attraction is the Shangrila snow mountain and valleys.

There initially was a short-term boom in tourism but natural disasters and road repairs have taken a toll on the area. The village's isolation makes banks reluctant to lend.

Finally, local tourism officials are taking a ride on China's push for asset securitization. The region financed 840 million yuan through investors to keep tourism alive in the area.

The investment period is 7 years, the interest rate is 6.8 percent. That's slightly higher than the bank but it allows us to raise more funds than from banks.

All of the future revenues from local tourism will be used as collateral with interest charges of 58 million yuan.

The securitization of assets unleashed the potential of the area's tourism, lifting local economic development.

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