The Maldivian government has made the decision to grant a second chance to companies which had applied for relief loans, but had their applications rejected because they had laid off local employees as a cost cutting measure due to the COVID-19 pandemic.
Relief loans to assist businesses facing cashflow constraints due to the COVID-19 pandemic are a component of the economic recovery package announced by Finance Ministry. The loans are issued through Bank of Maldives (BML) and SME Development Finance Corporation (SDFC). There’s a stipulation that companies which apply for the loan assistance must not have laid off any local employees due to COVID-19 outbreak or during the funding period.
At a National Emergency Operation Center press briefing on Saturday afternoon, Finance Minister Ibrahim Ameer said that companies which had applied for relief loans included companies which had failed to meet the conditions because they had laid off local employees or forced employees to accept no pay leave, and that applications from such companies had been rejected.
Ameer said that the government acknowledged that everyone was facing hard times due to the COVID-19 pandemic, and that since the primary concern of the government remained the welfare of the people. He said the government had therefore made the decision to grant a second chance to companies in the hopes that it improved the situation of people the companies had employed or continued to employ.
Ameer said that companies will be deemed eligible for relief loans if they reinstate the employees they laid off, and pay minimum MVR 5,000 as a monthly salary.
“If they rescind the decision to terminate, suspend or cut the salary of employees, and pay a salary of minimum MVR 5,000, then that company or business will be eligible,” said Ameer.
Ameer announced that BML had disbursed MVR 109.6 million in relief loans to 83 parties, and SDFC had disbursed MVR 6.2 million in relief loans to 76 parties.
Relief loans do not require equity or security. The interest rate is six percent per annum, while the repayment period is three years (excluding a six-month grace period).