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MMA launches scheme for affordable housing loans through banks

The MMA specified that flats and housing units can only be purchased under this scheme from housing projects approved by the Authority.

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Shazma Thaufeeq

2025-10-25 15:14:05

The Maldives Monetary Authority (MMA) has decided to introduce a loan scheme, facilitated by banks, that will allow residents in the Malé region to purchase affordable housing units.

In a press statement released today, the MMA announced its decision to launch a special scheme called the "Inclusive National Affordable Housing Scheme" and has published the relevant guidelines. The scheme aims to facilitate financing through the financial system for individuals seeking to purchase new housing in the Malé region. MMA stipulated that between 10 and 15 percent of the total loan portfolio of all banks must be allocated to this scheme.

MMA stated that the scheme will run for a period of five years, and the repayment period for the loans will be 25 years. However, a shorter term may be granted if requested by the facility recipient.

The goal of MMA is to arrange financing for approximately 3,500 housing units through this scheme over the five-year period.

MMA indicated that the financing facilities under the scheme can be provided through two main options:

  • Type A / Lease Ending with Ownership
  • Type B / End-User Financing Option

Lease ending with ownership (Type A)

This option is for housing projects financed and executed by banks.

  • Financing facilities can be granted for a defined period to eligible individuals purchasing homes built by the authority running the scheme.
  • The annual profit rate for this loan is capped at 5 percent of the loan principal, in accordance with Islamic financing principles.
  • Upon completion of the rental/lease payments as per the loan agreement, the ownership of the property will be transferred to the name of the borrower.
  • No collateral (mortgage) or equity is required for the loan, but a security deposit may be required for the rental/lease period.

End-user financing option (Type B)

This option is for housing projects financed and executed by developers or investors.

  • Loans can be issued to eligible individuals to purchase housing units from specific developers determined by the scheme.
  • The general terms, price, and duration of the loan facility under this model will be determined as directed by the MMA.
  • The maximum annual profit rate for this loan is capped at 6 percent of the loan principal, in accordance with Islamic financing principles.
  • The buyer of the housing unit must provide 5 percent of the value as equity.
  • The purchased property must be mortgaged as collateral, but no other collateral or security is required.

MMA specified that flats and housing units can only be purchased under this scheme from housing projects approved by the Authority.

The MMA further stated that financing facilities under the scheme will only be available to individuals who are acquiring a flat or housing for the first time, and the person must have the financial capacity to meet the monthly repayment obligations of the financing facility.

The Authority's statement highlighted that providing access to affordable loans is a priority for the MMA, aimed at developing and advancing the financial sector while enhancing the financial capability of the general public.

"Expanding the public services available through the financial system and arranging financing at a suitably affordable price will have a positive impact on the country's social and infrastructure development, in addition to the financial system," the statement read.

MMA previously launched a similar scheme in 2017 to provide loans through banks for purchasing flats from housing projects, including the Malé Grand and Gaakoshi flat projects, built on the former Arabiyya School site.

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