The Government understands the need for funding for local businesses, as the private sector is highly reliant on bank loans as the primary source of funding for their investments. With few commercial banks that finance investments in the country, local businesses often face the impossible task of putting up the level of collateral demanded by the banks and are often challenged by the high rates of interest they are required to pay even if they are successful in getting the finance required.
Local businesses are unable to access credit for tourism investment for various reasons. This includes restrictions due to the high degree of exposure of the bank portfolio to the few dominant sectors, the relatively small size of the banking sector against the borrowing requirements from the private sector and other constraints in the domestic financial market. Moreover, the smaller scale of our local companies has been a deterrent to access funding from overseas. The dedicated MFMC will work towards accessing international capital markets, raising long-term finance, and delivering returns to investors. The newly established corporation will manage multiple funds focusing on key policy areas, which will drive economic transformation through investment, catalyzing entrepreneurship and job creation across different geographic areas within Maldives. The Government believes that an active role in facilitating capital-market solutions for the private sector will help stimulate private sector investment and invigorate long-term economic growth.