Major barriers to access funding for community-based tourism enterprises: evidence from Costa Rica

What is it about?

Access to finance is crucial for the success of Community-Based Tourism Enterprises (CBTEs) as a sustainable tourism solution; however, the barriers they encounter in securing funding remain understudied. Using Costa Rica as a case study, we identified the major obstacles and propose practical solutions for their mitigation.

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Photo by Adèle Beausoleil on Unsplash

Photo by Adèle Beausoleil on Unsplash

Why is it important?

Findings reveal that accessing finance, particularly refundable instruments, is challenging for CBTEs. While non-refundable instruments like grants and donations presented no major obstacles, six significant barriers hindered access to refundable finance: challenging governance structures, limited financial viability, weak business knowledge and management, bureaucracy, lack of collateral or guarantor, and a negative perception towards refundable finance. Three potential solutions are proposed to overcome these barriers: enhanced training in governance and business, public policies to simplify enterprise management, and adjusted financial assessment criteria for CBTEs, prioritising turnover over profitability.

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