The government’s renewed SME (small and medium-sized enterprises) loan program will ‘revolutionise’ the Maldivian economy, President Ibrahim Mohamed Solih has said. 

Speaking at an event on Monday to inaugurate the SME Development Finance Corporation, President Solih said that it will allow more economic mobility, and for smaller businesses to make more of an income. 

President Solih went on to say that SMEs are the ‘backbone’ of the Maldivian economy, in that they make up 93 percent of all businesses registered in the country. 

In his speech, President Solih also noted that SMEs have more of an impact on society, adding that while larger businesses rake in millions in profit, smaller businesses provide more employment for communities they operate in. 

The president said this disparity has ‘unfortunately’ been perpetuated by smaller businesses lacking the support of the government, and that the SME loan program will create more youth entrepreneurs, and skilful workers. 

Establishing a separate financial institution to facilitate low-interest laons for SMEs, where administrative councils across the country have a stake in, is one of the new government’s first 100-day pledges. 

The program introduced on Monday will see the government provide loans in four primary categories: transport, agriculture, business support, and for tangible assets. 

The loans carry a low interest rate of between six and nine percent, below the current rates available at any commercial bank in the country. 

As a means of encouraging entrepreneurship and domestic productivity, the government will also be conferring an SME award, President Solih said.