Concessions on real estate loans to require rent reductions

Parliament’s Economic Affairs Committee, on Wednesday, passed a report which recommends that banks, when granting moratoriums on loans taken to finance real estate projects stipulate that that the borrower reduce the rent.

The report was compiled by the committee to offer the Parliament’s opinion regarding programs planned by the government to mitigate the loss in income to individual citizens and businesses due to the COVID-19 pandemic.

The report was passed during a virtual committee meeting this Wednesday and has nine recommendations.

One recommendation was that banks, when granting moratorium packages on loans taken to finance real estate projects, especially within the Greater Male’ Region, add the stipulation that the borrow must reduce the rent.

Another recommendation was increasing the limit on loans issued under the economic recovery package to small and medium enterprises by 20 to 30 percent, as well as ensuring that the loan amount covers the business’ recurrent expenditure, and arranging a reliable account to businesses with the ability to repay the loans.

The committee also recommended that small and medium enterprises, resort workers and the family of resort workers be identified and also be offered assistance under the stimulus package.

It recommended that MIFCO and other companies which manufacture value added products be eligible to SME loans, and individuals who produce food products also be eligible for assistance under the stimulus package.

The committee also recommended that Maldives Monetary Authority take measures to ensure that importers of food and medicine have access to foreign currency supplied by MMA to commercial banks, and to provide an unemployment allowance to those who are laid off due to the COVID-19 pandemic, and establish a mechanism to assess people who are laid off and people who are self-employed.

The committee asked that the government provide a detailed report on the parties to which the government is providing assistance to in response to the COVID-19 pandemic, as well as the assessment process to the committee. And that the governments also establish a register of its capital assets which must include details regarding the loans taken by using government company assets as collateral, and sharing it with the committee.

The committee has also asked that the government provide a detailed report on the implementation of its stimulus package to the Parliament every 15 days.