The Cabinet has decided to sell the government’s shares in SME Development Finance Corporation (SDFC), an institution established to provide loans to small and medium enterprises, to the Bank of Maldives (BML). This decision was made after deliberating on a research paper presented by the Ministry of Finance regarding the positive changes that would result from this move, following a proposal submitted by the Bank of Maldives expressing interest in acquiring SDFC shares.
The government has noted that as lending to small and medium enterprises is something they wish to continue without interruption, selling SDFC shares to the Bank of Maldives will ensure that small and medium enterprises will continuously receive loans through the bank’s financial capabilities. After acquiring SDFC, the Bank of Maldives has proposed to disburse 500 million rufiyaa in loans to small and medium enterprises in the first year, and 1.9 billion rufiyaa over five years. They have also decided to allocate 300 million rufiyaa for business startups over the next three years.
After the Bank of Maldives acquires SDFC, it will operate as an Islamic finance institute conducting financial transactions according to Sharia principles. It will also function within the world’s most advancing digital banking system. Even under BML, SDFC will continue to provide loans to small and medium enterprises at interest rates not exceeding the current rates. Financial transactions will be structured to create a favorable environment for businesses and increase their financial capacity and prosperity.
In line with yesterday’s Cabinet decision, once arrangements are finalized, SME digital financing services will expand throughout the Maldives via the Bank of Maldives network. Digitalizing and automating SDFC’s systems will reduce manual work, speed up loan processing, and improve overall efficiency of SDFC. As the Bank of Maldives is a public company, SDFC’s governance will also be strengthened under its supervision, enhancing the principles applied in planning, management, and service delivery.
