In a major step toward strengthening small and medium enterprise (SME) financing in the Maldives, the Cabinet has approved the sale of the Government’s stake in the SME Development Finance Corporation (SDFC) to the Bank of Maldives (BML). The decision follows a comprehensive evaluation of a proposal submitted by the Ministry of Finance and Planning, which underscored the long-term financial and operational benefits of the acquisition.
The Government’s move is aimed at ensuring continuous access to financing for SMEs, one of the most vital sectors contributing to the nation’s economic growth and employment. As part of the agreement, BML has pledged to inject MVR 500 million into SME lending within the first year. Over the next five years, BML targets to expand this figure to MVR 1.9 billion, with a dedicated allocation of MVR 300 million to support business start-ups over the next three years.
Once the transition is completed, SDFC will operate under the framework of Islamic finance, fully adhering to Shariah-compliant financial practices. The transformation will include the integration of a modern digital banking platform, aligning with BML’s strategy to deliver streamlined, ethical, and technology-driven financial services across the country.
The acquisition will empower BML to utilise its nationwide presence to deliver SME-focused Islamic financing services beyond urban centres. The digitalisation of SDFC’s operations under BML’s stewardship will improve service accessibility, reduce administrative bottlenecks, and ensure faster loan processing. This is expected to enhance governance and regulatory compliance while maintaining stability in interest rates for small and medium-sized business loans.
BML’s commitment to maintaining existing interest rates for SME loans offers reassurance to entrepreneurs and emerging businesses, ensuring that financial inclusion is not compromised during the transition. Furthermore, the institution’s advanced banking infrastructure will drive increased operational efficiency and customer-centric service delivery.
By merging SDFC’s core objective of SME empowerment with BML’s expansive reach and financial expertise, the move is expected to create a more resilient and inclusive financing ecosystem. For international observers and foreign investors, this development underscores the Maldives’ ongoing efforts to modernize its financial sector while promoting ethical, Shariah-based economic growth.
The initiative not only reflects the Government’s policy direction to support entrepreneurship and local business development but also aligns with the broader vision of economic diversification and digital transformation, key pillars that continue to shape the future of the Maldivian economy.
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