The OPEC Fund for International Development has signed a USD 10 million loan agreement with the Bank of Maldives (BML), in order to assist in the country’s economic recovery efforts following Covid-19.

OPEC said that the USD 10 million private sector loan is to be used for "on-lending to small and medium-sized enterprises (SMEs) engaged in tourism and related services in the Maldives that have been severely impacted by the pandemic".

While tourism is the most lucrative industry which directly accounts for nearly one-quarter of GDP and provides livelihoods for around one-half of the population, OPEC noted that the sector “experienced unprecedented challenges as a result of the Covid-19 pandemic, with a steep decline in tourism revenues that has had a profound impact on livelihoods and small businesses”.

OPEC Fund said that under the agreement, the national bank “will provide much-needed working capital to benefit businesses in the tourism and related industries”.

Its Director General Dr. Abdulhamid Alkhalifa said that BML “is in a strong position to support the tourism industry and local businesses, who are facing unprecedented challenges due to the Covid-19 pandemic.

He also noted that this private sector lending “further builds upon our established framework of cooperation with Maldives, which dates back to 1977 and has allowed the OPEC Fund to provide public and private sector financing to support critical development projects in the country for decades”.

Noting that BML has been working to reinforce its resources for Covid-19 response for the tourism and business sectors severely affected by the pandemic, BML’s CEO and Managing Director Tim Sawyer said that the funding “comes at an opportune time”.

He said that the support from OPEC Fund will aid in the bank’s efforts as the country continues on its road to recovery.

The OPEC Fund back in April 2020 approved a loan of USD 20 million, in support of the government’s Covid-19 recovery efforts.