The OPEC Fund for International Development (OFID) has signed a USD 10 million private sector loan agreement with the Bank of Maldives (BML). The loan will be used for on-lending to small-and-medium-sized enterprises (SMEs) engaged in tourism and related services in the Maldives that have been severely impacted by the COVID-19 pandemic.
OFID acknowledged the tourism sector directly accounts for nearly one-quarter of GDP and provides livelihoods for around one-half of the population and that the sector has experienced unprecedented challenges as a result of the COVID-19 pandemic, with a steep decline in tourism revenues that has had a profound impact on livelihoods and small businesses in the Maldives.
The Maldivian economy contracted by nearly 30% in 2020, and poverty rates climbed from 2.1% in 2019 to 7.2 in 2020, according to a recent World Bank report.
BML, as a leading lender to the tourism industry and the largest financial institution in the Maldives, will provide much-needed working capital to benefit businesses in the tourism and related industries.
OFID has provided public and private sector lending to the Maldives for decades, financing projects in transportation, multi-sectoral, water and sanitation, and financial sectors. The latest loan is aligned with its COVID-19 Response Package approved last year to assist in the impact and recovery efforts of partner countries.