The Ministry of Economic Development and Trade has announced plans to establish a financial authority and a development bank within the building that currently houses the Business Center Corporation (BCC)-run SME Hub.
BCC Managing Director Ibrahim Ziyau confirmed to ‘Sun’ that only two floors managed by the corporation will be vacated to accommodate these new entities. The ground floor and the top floor, which currently hosts gaming and entertainment facilities, will be vacated, while the rest of the building will continue to provide working spaces for local small-to-medium enterprises (SMEs).
“The other levels do not benefit SMEs. The floors given on rent for commercial uses benefit BCC, so the vendors will continue to operate their businesses in all the other floors except the lowest and top levels,” Ziyau stated.
Ziyau further explained that the SME Hub operates in a private building, with kiosks leased at a lower rate. This arrangement has led to higher expenditures for BCC compared to the revenue generated from the premises.
Aiming for Sustainable Development
The development bank is being established as part of the state’s policies to invest in sustainable and long-term economic and social development initiatives. This bank will seek funding for government-initiated urban development projects and address the challenges in raising funds for the Public Sector Investment Program (PSIP) through syndication financing.
By establishing this bank, the government aims to enhance investor confidence and enthusiasm in the Maldivian market, thereby retaining foreign currency within the local economy.
Role of the Financial Authority
The newly formed financial authority will focus on developing the necessary legal frameworks to introduce offshore and onshore financing services. This authority will also be responsible for the foundational work needed to establish offshore and onshore development banks and international financial centres in the Maldives, thereby fostering the growth of the financial sector.
Additionally, the financial authority will conduct research to identify modern solutions for both legal and administrative challenges, aiming to create a healthy and competitive financial system.
The Ministry of Economic Development and Trade’s decision to establish these entities aligns with broader objectives of sustainable economic growth and the development of a robust financial sector in the Maldives. By creating a conducive environment for investment and financial services, the government seeks to drive long-term economic prosperity and stability.
