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State to commence issuing loans under stimulus package

Mariyam Malsa
02 April 2020, MVT 15:28
Minister of Finance Ibrahim Ameer speaking to the press. PHOTO: AHMED AWSHAN/ MIHAARU
Mariyam Malsa
02 April 2020, MVT 15:28

Minister of Finance Ibrahim Ameer, on Wednesday, stated that the government would begin issuing loans to businesses during the upcoming week under the MVR 2.5 billion stimulus package introduced to counteract the financial impact of the COVID-19 pandemic.

Speaking at a press conference held at Dharubaaruge convention centre, reiterated his previous statement, stressing that the stimulus packages were intended to avoid the loss of jobs in every sector and that employers who were reported to be mistreating their staff would not be prioritised in the receiving line for the state-distributed financial aid.

He also urged companies to not reducing salaries for individuals paid below MVR 10,000 per month, condemning the actions of employers that were terminating jobs, reducing wages or forcing employees to accept unpaid leave, stating that all businesses should act in accordance with the law.

Loans under the stimulus package will be issued to small and medium enterprises, resorts and large scale businesses through the SME Development Finance Corporation (SDFC) and Bank of Maldives (BML).

Furthermore, the loans will carry a six percent interest rate and a three year repayment period with businesses allocated a six-month grace period to begin repaying the loaned amount.

BML is scheduled to grant loans to public companies which have an annual revenue above MVR 10 million.

"So far, the stimulus packages introduced by most countries are similar. Next there will be a stimulus package to guarantee jobs for citizens", stated the finance minister.

As part of government's economic recovery plan to minimize the negative financial impact of the pandemic, BML will push back its loan repayment period by six months, along with a 20 percent discount on repayment amount, while Housing Development Finance Corporation (HDFC) and SDFC will extend loan repayments by six months. In addition, Maldives' central bank will distribute USD 150 million to banks to mitigate the challenges in acquiring US dollars.

Earlier, the government vowed to reduce state spending by MVR 1 billion. In this regard, the state slashed the salaries of all political appointees and heads of state-owned enterprises (SOEs) by 20 percent. The Parliament followed suit, approving a 20 percent cut on their members’ salaries as well.

Maldives currently has 19 confirmed and six active cases of COVID-19, with a total of 13 recoveries. While there are two confirmed cases of Maldivians, no local to local transmissions have been recorded.

The World Health Organization has classified the spread of COVID-19 as a global pandemic. The novel coronavirus has infected over 936,400 people and claimed over 47,250 lives around the world. However, out of those infected, more than 194,500 people have recovered.

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