New Financial Authority and Development Bank to Be Established in SME Hub Building

The Ministry of Economic Development and Trade has announced plans to establish a financial authority and development bank within the building that houses the Business Center Corporation (BCC)-run SME Hub. This initiative aims to bolster economic growth and support sustainable development in the Maldives.

BCC Managing Director Ibrahim Ziyau confirmed that only two floors operated by the corporation will be vacated for the new entities. The ground level and the top floor, which currently hosts gaming and entertainment facilities, will be repurposed. The rest of the building will continue to provide working spaces for local small-to-medium enterprises (SMEs).

"The other levels do not benefit SMEs. The floors given on rent for commercial uses benefit BCC, so the vendors will continue to operate their businesses in all the other floors except the lowest and top levels," Ziyau stated.

Ziyau highlighted that the SME Hub operates in a private building, and the kiosks are leased at a lower rate. This arrangement has resulted in higher expenditures for BCC compared to the revenue generated from the premises.

The establishment of the development bank aligns with the state's policies to invest in sustainable and long-term economic and social development initiatives. The bank will also seek funding for urban development projects initiated by the government, addressing challenges in raising funds for the Public Sector Investment Program (PSIP) through syndication financing.

The development bank aims to improve investor confidence and enthusiasm to invest in the Maldives while retaining foreign currency in the Maldivian economy. The financial authority, on the other hand, will develop the legal frameworks required to introduce offshore and onshore financing services.

In addition to these functions, the authority will work on establishing offshore and onshore development banks and international financial centers in the Maldives. It will also play a crucial role in developing the financial sector by conducting research to facilitate modern solutions to legal and administrative challenges, creating a healthy and competitive financial system.

This initiative is expected to bring significant economic benefits and provide a robust foundation for future financial developments in the Maldives. The collaboration between the new financial entities and the existing SME Hub will create a dynamic environment conducive to economic growth and innovation.