Government introduces SME Credit Guarantee Scheme

Government has introduced a credit guarantee scheme for small and medium enterprises via Bank of Maldives and Maldives Islamic Bank.

The credit guarantee scheme was introduced in a ceremony held at Maldives Monitory Authority on Sunday.

The agreement was signed by Governor of MMA - Dr. Azeema Adam, CEO of BML – Andrew Healy, and CEO of Maldives Islamic Bank – Haaris Haroon.

The credit guarantee scheme will be applicable for business development loans taken from BML, and for murahaba general asset financing and vessel financing loans by Islamic Bank.

The scheme will be applicable for loans ranging from MVR 100,000 to MVR 1,000,000.

Speaking to media after the ceremony, Head of SME Credit Guarantee Scheme, Ibrahim Nasir said that the scheme will provide assistance to small and medium enterprises in obtaining credit.

Nasir said that the government will allocate a maximum amount for the scheme each year, and that MVR 50 million has been allocated for the scheme this year.

He said that government will provide credit guarantee for 90 percent of each loan taken by the business under the scheme.

“Such credit schemes are launched for small enterprises in other countries as well. Its launched bigger than this. This scheme was launched to assist development of small enterprises. Small and medium enterprises play a vital role in each country. This is to give them more access to finance,” said Nasir.

Public Relations Manager of BML, Mohamed Saeed said that the bank’s business development loan scheme had been amended to integrate the credit guarantee scheme. And that the loan would be very useful to raise capital and expand small and medium enterprises.

Meanwhile, Islamic Bank will be integrating the credit guarantee scheme into their murahaba general asset financing and vessel financing scheme.

Both BML and Islamic Bank will be providing the schemes at the base rate of 9 percent. And will provide 5 years to repay the loans.

BML will be offering the loan collateral-free while Islamic Banking will be keeping the asset financed through their schemes as collateral for a pre-determined number of years.

“We will be keeping the asset acquired as collateral – a machinery or a boat. We will provide the finance facility after collateralizing the asset,” said Head of Marketing and Corporate Affairs of Islamic Bank – Mohamed Shafau.

Boath BML and Islamic Bank announced that finance facilities through the credit guarantee scheme will be available from this Sunday onwards.

Only small and medium enterprises registered with Economic Ministry and Maldives Inland Revenue Authority are applicable for the scheme.