Access to low-cost financing with limited collateral requirements has inspired many women to start family businesses in beautiful Maldives.
ADB project has been supporting entrepreneurs in micro, small and medium-sized enterprises (MSMEs).
Maldives – Formed by a collection of jewel-like atolls widely dispersed in the Indian Ocean, Maldives' geography poses multiple challenges to doing business.
Inter-island transportation comes at a high cost, leaving linkages with markets quite poor.
Limited access to finance in these small islands holds back local business development and employment opportunities.
To help overcome these challenges, an ADB project has been supporting entrepreneurs in micro, small and medium-sized enterprises (MSMEs).
The project is providing them with a line of credit facility.
About 80% of this credit facility has benefitted MSMEs, created by the women and youth.
The project has provided new start-up loans to 172 new businesses, which are operating successfully at the moment.
Access to low-cost financing with limited collateral requirements has inspired many women to start family businesses.
“To expand my business further, I received ADB’s credit facility,” says Zumarath Rasheed, Owner of Scoops N’ Smiles, Thinadhoo.
“My business is successful, and it has helped improve our living standards.”
Zumarath’s is far from being an isolated example.
“After looking after my kinds for 10 years, I decided to open this center to help working parents,” says Fathimath Shirmeela, Owner of Cuddle Care, Malé.
“So now I have 13 employees with me and 60 kids in the center. I think it helps working parents tremendously.”
Besides the credit facility, seven business centers set up across the country offer a wide range of services for MSMEs, including online business registration.
“Business centers play a crucial role. We bridge small businesses and markets,” explains Ahmed Ashraf, Training Coordinator, Business Center, Thinadhoo.
“We facilitate access to finance such as ADB line of credit for these businesses. We provide training, market linkage, and are helping develop business plans for them to access funding.”
“A vibrant MSME development is crucial for diversification of the Maldivian economy,” comments Kristina Hidalgo, Senior Financial Sector Officer at the Asian Development Bank.
“Therefore, ADB’s credit facility has prioritized sectors other than tourism and fisheries.”
In addition, to sustain high quality lending to MSMEs by the financial institutions, credit information bureau services and the Credit Guarantee Scheme have been expanded.
“Following the achievement of ADB’s program, the Government of Maldives has incorporated a new financial institution. SME Development Finance Corporation will now take the role of SME bank,” explains Neeza Imad, State Minister, Ministry of Economic Development.
“We have an ambitious plan to develop SMEs because they are the backbone of Maldivian economy, providing employment.
“We will be working within the well-established ecosystem to enhance their potential.”