The SME Development Finance Corporation (SDFC) has launched an initiative to convert its existing lending portfolio into fully Shariah-compliant facilities. The transition will begin with the adoption of the Diminishing Musharakah contract and later expand to include other Islamic financing models such as Wakalah Bil Istithmar and Tawarruq.
This transformation marks SDFC’s shift into a fully Shariah-compliant digital subsidiary of the Bank of Maldives, reflecting a wider goal of enhancing financial inclusion and introducing ethical, technology-driven financing solutions for small and medium enterprises (SMEs) in the country.
As part of the process, SDFC will convert existing conventional loans into Shariah-compliant financing to ease repayment challenges faced by customers. These conversions will include extended repayment terms designed to support borrowers in managing their financial obligations more effectively.
The initiative will be rolled out in phases, beginning with the first phase launched today, and is expected to be completed by the first quarter of 2026. Customers will be notified in batches through SDFC’s customer portal and contacted directly to ensure a smooth transition.
SDFC CEO and Managing Director, Badhurudheen Hassan, described the initiative as a defining moment for the corporation, adding that it provides customers with an opportunity to regularise repayments through an ethical, Shariah-compliant framework.
With this repositioning, SDFC aims to play a central role in the digital transformation of SME banking in the Maldives, aligning with Bank of Maldives’ broader vision to support inclusive and sustainable economic development. The corporation’s focus will include empowering underserved sectors such as start-ups, women-led enterprises, fishermen, farmers, agribusinesses, and digital ventures.
