Up to MVR 7.71mln to be issued to resorts under stimulus package

Up to MVR 7.71mln to be issued to resorts under stimulus package

The Finance Ministry has revealed the details of the Economic Relief Package announced by the government to mitigate the losses caused to the economy due to the global COVID-19 pandemic.

The government will be taking seven important steps to recover the country's economy. This includes the issuance of loan for working capital to local businesses and entrepreneurs, partial subsidization on utility bills for a two month period, 6 month moratorium by Bank of Maldives and Housing Development Finance Corporation (HDFC) on principal and interest payments of housing, personal and business loans and 6 month moratorium on principal and interest payments of business and personal loans issued from SME Development Finance Corporation (SDFC). A reduction of loan interest rate by 4% will also be applied during this period. The government will also postpone the repayment period of loans granted under the National Student Loan Scheme by six months, in addition to issuing allowances for those who lose employment due to the COVID-19 pandemic.

Working capital loans for businesses and loans issued to entrepreneurs will be issued through the Bank of Maldives (BML) and SDFC. The loans will be issued at an interest rate of 6% with a grace period of six months. The interest and principal do not have to be paid during this duration, and the loan will have to be repaid over a three-year duration.

Loans will be issued to local tourist resorts through BML. The maximum amount that can be released to each resort is MVR 7.71 million. The government will prioritize resorts with high local ownership, and employ over 45% locals. The government will be assessing these factors and relaying the information to BML.

Additionally, the government will check if the businesses have any non-performing assets, and if the businesses made any profit during the 2019 fiscal year. The cashflow forecast for the upcoming three years will also be taken into account. Any resorts that have terminated employees or forced them to take no-pay leaves due to COVID-19 will not be eligible for the loans.