The European Union Contributes EUR 2 Million As Recovery Aid for The Maldivian Tourism Sector

The European Union has signed EUR 2 million as grant aid for the project ‘EU Support for a Resilient Recovery of SME Tourism Industry in the Maldives’. The event was held on August 17,2021. 
 
HE Denis Chaibi, Ambassador of the European Union to the Maldives, and Mr. Hassan Manik, Managing Director of the Maldives Fund Management Corporation, signed the project agreement. The event was also attended by the Minister of Economic Development Uz. Fayyaz Ismail and Minister of Tourism Dr. Abdulla Mausoom. 
 
The overarching goal of the initiative is to help the Maldives build a more resilient and diverse economy by assisting tourist sector MSMEs in recovering from the COVID-19 crisis. Following the emergence of the COVID-19 pandemic, MSMEs in the tourist industry experienced major business interruptions and required financial help to restart operations in tandem with economic recovery efforts. 
 
The Maldives Government acknowledges the economic benefits of promoting MSMEs in the tourist industry, as the expansion of such enterprises has given diversity to the tourism sector and provides a direct push to local economies through employment and entrepreneurial possibilities. 
 
Guesthouses and safari vessels are examples of MSMEs that have been particularly hard hit by the crisis, owing to lower financial buffers to weather a large shock to their businesses and limited access to working capital finances or overdraft facilities outside of government-facilitated economic relief loans. 
 
The EU-funded initiative was created to help MSMEs in the tourist industry, especially guesthouses and safari boats with less than 40 beds. It is expected that more than 600 MSMEs will benefit from the proposed award, which would be a huge help to such firms attempting to restart operations in the post-COVID-19 recovery period. All MSMEs with a valid operating license at the start of the COVID-19 crisis (Dec 19, Jan 20 or Feb 20) is eligible to apply for the assistance. 
 
In addition to a direct transfer component of EUR 1,400,000, the project will provide EUR 600,000 in technical assistance to beneficiaries for training programs aimed at high impact areas such as improving business operations, financial management, sustainable waste management, and gaining access to international markets. 
 
H.E. Uz Fayyaz Ismail, Minister of Economic Development, expressed gratitude for the EU's significant support, adding that "the European Union has been a vital contributor to the Maldives economy throughout the years." The project's direct grant scheme will be a significant and timely assistance package for MSMEs' recovery efforts.