The Capital Market Development Authority (CMDA) has announced that businesses in the Maldives have raised USD 29.19 million through the capital market in the past two years. The information was shared by CMDA on state media programme, Raajje Miadhu, broadcast by Public Service Media (PSM).
CMDA’s Chief Executive Officer, Mohamed Hussain Manik said businesses typically rely on banks to raise capital. However, he noted that CMDA now offers an alternative for private businesses through the capital market.
Mohamed Hussain Manik explained that banks typically lend to businesses on a mortgage basis. However, funds can be raised through the capital market with a sound business concept and a properly prepared prospectus or securities statement that meets CMDA standards, he said. This way, businesses can raise funds directly from investors through the capital market, he explained.
"There are a lot of investors on the capital market side. Private companies, even small businesses, are now raising money from the capital market. If a company develops a business concept and prepares the prospectus or a share statement to the required standards, public investors are likely to back the business,” Mohamed Hussain Manik said.
Noting that there is now opportunity for medium-sized businesses to attract investors similar to large corporations, Mohamed Hussain Manik said there is a Second Board of the stock market for small businesses to enter the stock market. Private businesses also have the opportunity to attract investors and raise capital through Islamic financial instruments such as sukuk, he added.
"In the private segment, eight or nine companies have traded shares. Approximately USD 29.1 million was raised in 2023 and 2024,” Mohamed Hussain Manik said, adding that these developments point to growing opportunities in the sector.
CMDA said if funds are raised for businesses through the capital market, the operations of companies will be strengthened. When a business is starting out and receive support, they grow over time to become businesses that benefit investors, the authority said.
The CMDA is an agency established under the Financial Securities Act to regulate the capital market in the Maldives. Any investment opportunity offered to the public must be authorised by the CMDA.