Prior SDFC loan amount to increase: BML

The SME Development Finance Corporation (SDFC), a subsidiary of the Bank of Maldives (BML), is set to have an increase in loan borrowing as stated by BML last night.

In order to increase the financial spending power of the SDFC and to give out loans without pause, President Dr. Mohamed Muizzu's cabinet has decided to sell the SDFC's government shares to BML.

BML stated in a press release last night that their subsidiary branded as a "digital first subsidiary", SDFC will be financing or giving out loans beyond the agreed upon total. The loan will be given out in parallel to favorable conditions for SME's, as mentioned in the press release.

BML said that the SDFC will provide modern technology and Islamic Financing services for SME's. The digital bank's strategy will prioritize the financing of newly started businesses, women-run businesses, fishermen, farmers, farming businesses, sustainable businesses and e-commerce businesses.

The reason BML is acquiring SDFC is to use BML's strong financial health and by thinking of the long run, to also utilize the up and coming digital banking experience to bring about a transformation in banking for SME's, to boost the public's participation in a financial sense and to bring about abundance to the Maldivian economy, as stated by the bank.

BML also said that the SDFC will also provide financial aid for MSME businesses, along with increasing financial awareness, a digital landing platform and a digital marketplace, as is their want to provide financial solutions.

BML CEO Mohamed Shareef said that the MSME sector is an important arm in the progress of the Maldivian economy and innovation.

"With the bank's decision, we will be utilizing our digital first subsidiary to provide Islamic Banking services for SME's and to offer them modern banking experiences. Our work is to continue this line of service for as long as needed," said the CEO.

In the BML press release, it's stated that their aim is to loan out MVR 500 million through the subsidiary within its first year. The Maldivian Islamic Social Financing Initiative (MISFI) will also be investing MVR 300 million in three years for the societal development and to support sustainable business growth.

BML said that they will reveal further details concerning the governance and how the SDFC will be run in the future.

The President's Office stated last night that the selling off of the SDFC's government shares was due to BML's interest to acquire them via a proposal that was presented to the office. The decision was finalized after the President's Office held a discussion concerning the proposal and the research papers provided by the Finance Ministry.