Travel Micro Credit: Travel now, Pay Later!

 Introduction

The tourism, travel and hospitality industry are slowly bouncing back its economy as the world is recovering from the COVID19 pandemic. Travelers around the globe have started their future trip to escape from the stress that the pandemic and work has caused. Because of the pandemic, most travelers have utilized their savings specific to their travel plans to spend for food and medicine when COVID19 restricts majority from working.

While recovering, micro-lending business is one of the many potential businesses we can build to support and accommodate the financial needs of the people whether for personal use or for their travel plans. Filipinos, particularly, loves to spend holidays and events at the beach or even during regular weekends - we love to travel. In the Philippines, almost all island in the country can be a tourist spot, it is a perfect spot for leisure, retreat and relaxation; thus, people here save and spends money just to be with the nature and relax – we call it stress reliever.

Main Topic

According to TRUiC Team (2023), “Microlending is the practice of lending smaller sums of money, typically to those who are unable to obtain funding through an established federal institution. Microlenders typically don’t request any type of collateral before loaning out the money. For-profit institutions may charge a high rate of interest to mitigate financial risks should the borrower default on their loans.”

Building Travel Micro Credit business and implement a “Travel No, Pay Later” program interest me because of the fact that the world is now starting to recover from the pandemic in which travel restrictions were lifted and people are now allowed to travel with less hassle. Because of this, I thought this opens an opportunity to lend a hand to those who are in the process of recovering financially but wanting to relieve their stress by traveling to different tourist spots in the country or even abroad.

The business will provide financial needs to individuals who aims to pursue their travel goals that were not materialized because of the restrictions and financial issues related to COVID19 pandemic. The borrower can travel and pay for the borrowed amount in installment until the liability is paid off on or before its maturity. By providing this, the business should be able to satisfy the customer’s goal while earning.

Since the target market is already identified, it is now the time to assess the payment terms and possibly offer assistance in planning their trip by engaging into partnership with travel agencies in the country in booking the trip for the customers. This will not only increase the consumer rate but will also strengthen the probability to create an exponential growth because the partner agency can market the payment terms which will benefit both the micro-lending business and the agency.

The challenge now is how to raise a capital to ensure that this business plan will materialize. Now, to raise a capital, I should create a copy of proposal and present it to potential investors. It is very important that I list down potential investors who will be willing to take risk and invest into the business. Attracting investors is a little bit challenging but if I profile them based on interest, income and risk; I should be able to come up with a presentation that will entice them to invest especially is the target investors are travelers themselves.

In addition to scouting investors, engaging into bank loans will definitely help. Identifying the best bank that offers a great deal for business loans is the key to a profitable capital. Just like scouting an investor, creating a proposal containing the company’s profile, long-term goal and current asset and income will ensure that the bank understand the business and provide loan for additional capital.

Conclusion

In conclusion, building this potential business will be as challenging as surviving from the pandemic, I have to be creative with the strategies that I should implement especially when attracting investors and banks to provide additional capital in the business. Once projected capital is achieved, the implementation will now then start by registering the business for tax and legal obligations.

After the registration, marketing and promotion should start right away. Utilizing various marketing platform available to make the business known to the target market and scouting for additional travel agency partners and have them help out with the promotions to attract consumers. While bringing the business to a stable phase, I should make sure to continuously attract investors and partner agencies to expand the business and be available nationwide and even until it operates globally.

Reference:

TRUiC Team (2023). HOW TO START A MICROLENDING COMPANY. TRUiC. https://howtostartanllc.com/business-ideas/micro-lending-company