SME Development Finance Corporation (SDFC) to Revolutionize MSMEs Financing in the Maldives

Founded in March 2019, SME Development Finance Corporation (SDFC) was established to fill the gap, provide loans and monetary assistance to business starters and other related individuals easily within one platform.

Currently, it is difficult to attain funds from banks in the Maldives for MSMEs who require financial assistance due to lack of sufficient materials that can be used as collateral.

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Lack of information regarding financial assistance by banks and financial institutes also plays a role where people are not aware of the monetary loans available.

The SME act was instilled in 2013 and current statistics doesn’t indicate the number of MSME businesses within the Maldives as it is not mandatory for businesses to classify themselves under the SME law.


Banks in the Maldives have been having trouble checking the validity and the potential of its loan-takers due to few transactions carried out through the bank, to check how much their income is, the number of transactions done, and correspondence issues.

It is generally difficult for most banks to finance these businesses as they have trouble making the risk assessment due to negligence in keeping track of finances and transactions of the SMEs.

Due to this, financial institutions haven’t been able to record the amount of SME businesses there is in the Maldives. However, based on MIRA tax files, 93% of the businesses in Maldives fall under the SME sector. Funds have not been facilitated for all these businesses due to the previously mentioned reasons. 

Hence, it is seen as a perceived risk and it takes time to provide the necessary assistance to the individuals. This is one of the reasons why SDFC was established; to take on the challenges, to provide easier and flexible solutions for MSME businesses.

One of the difficulties faced by businesses is the equity rate which is measured and covered by shareholders rather than by the creditors. SDFC’s equity requirement is a maximum of 20% but this can be lowered to even 10% depending on the project risk while other banks in the Maldives require equity of 30% when it comes to projects. 

Taking a look at mortgaging, 90% is required by banks in the Maldives when facilitating businesses and for collateral, they usually look for real estate or vessels which are accepted by a minimum number of institutions. They also don’t mortgage the land in the islands and this can be an issue faced by business owners in the islands.


Under SDFC, SMEs will be funded through concessional rates that are easy and accessible. SDFC’s interest rate is one of the lowest available within the country, which is between 4%-9%. 

Business startups and owners can further facilitate loans without risk of the mortgage, depending on project size and risk. The corporation accepts land, buildings, sea vessels and inventory (stock) of businesses as the mortgage.

Depending on the project, they also offer the option where businesses can take funds in exchange for strong receivables that are provided to the company later. SDFC has easier and flexible options for SMEs, unlike other finance institutions in Maldives. Hence, it can accommodate and help expand businesses.

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