Over MVR 1 billion in applications pour in for SME loan

Economic Minister Ismail Fayyaz says the value of loan applications sent in by small and medium enterprises to the SME Development Finance Corporation currently exceeds MVR 1 billion.

Fayyaz made the announcement during a panel discussion held at the Maldivian Democratic Party (MDP) Youth Congress on Friday.

Speaking at the panel discussion, Fayyaz said the SME Development Finance Corporation had received ‘an overwhelming number of’ loan applications since its inception.

“We have received MVR 1 billion in applications so far. We will have to filter out some of them. To filter out a great majority. We have limited funds,” said Fayyaz.

Fayyaz said he planned on increasing the allocation for the SME Development Finance Corporation in future State budgets.

“I will request a significant increase in the allocation for SME loans in the State budget. I believe efficient implementation of this is key to remedying multiple challenges faced by enterprises and the youth community,” said Fayyaz.

He pointed out that a significant percentage of SME loans is reserved for women and youth, and said the corporation will prioritize issuing the loans to young women.

“Our target is to assist people to stand up on their own two feet via these SME loans. The same as the decentralization policy, we are looking to assist people in development under the SME scheme,” said Fayyaz.

The Economic Minister said the corporation planned on allowing concessions in loan repayment, and will prioritize issuing the loans to the youth.

He said that 80 percent of the loans issued by SME Development Finance Corporation have gone to young men and women.

He also said that the incoming governor of central bank will negotiate with commercial banks to allow greater loan concessions.

“We want the youth to take risks. And if we are pushing the youth to take risks, we, as the government, as the State, must establish a safety net for them. There needs to be a way for them to get back on their feet if they fall. The legislative and financial system needs to be reformed when the whole system is overhauled,” said Fayyaz.

Fayyaz provided assurance the government will keep a close eye on the loan repayment process. He said the government will intervene to investigate causes for delays in loan repayment, and assist businesses if they are found to be facing any financial difficulty.

Meanwhile, Finance Minister Ibrahim Ameer, during the presentation of the supplementary budget last week, announced that the SME Development Finance Corporation had been approved a USD 25 million credit facility from State Bank of India.

An additional MVR 350 million was allocated for SME loans in the MVR 1.7 billion supplementary budget, which was approved by the Parliament on Monday, August 27.