Bank of Maldives (BML) has announced the acquisition of the SME Development Finance Corporation (SDFC), following Cabinet approval of the Government’s divestment of its stake in the institution.

The acquisition, initiated by a proposal from BML, aims to strengthen support for the Micro, Small and Medium Enterprise (MSME) sector across the Maldives.

The decision was made after careful consideration of a report submitted by the Ministry of Finance and Planning, which assessed the benefits of the transition. According to the report, the transfer would help ensure continued and uninterrupted access to finance for MSMEs while leveraging BML’s financial capacity and nationwide infrastructure.

Under BML’s ownership, SDFC will continue to operate with its original mandate but will be transformed into a Shari’ah compliant, digital-first subsidiary. The entity will focus on expanding financial access for underserved segments, including start-ups, women-led businesses, fishermen, farmers, agribusinesses, and enterprises in trade and e-commerce.

This initiative draws on BML’s financial position and growing digital expertise. By integrating SDFC into its national network, the Bank aims to accelerate the digitalisation of MSME banking and advance financial inclusion as part of its commitment to supporting economic diversification.

The new subsidiary will serve as the principal delivery channel for BML’s tailored MSME services. Planned offerings include digital lending platforms and an online marketplace, alongside improved access to funding and financial literacy resources. The adoption of digital banking systems is also expected to enhance operational efficiency, reduce manual processing, and accelerate loan approvals.

BML Chief Executive Officer, Mohamed Shareef, noted that the MSME sector continues to be a vital contributor to economic development and innovation. He affirmed that the Bank remains committed to providing a transformative banking experience for these businesses through the newly restructured Islamic finance institution.

The acquisition is anticipated to significantly increase SDFC’s lending capacity while maintaining current SME lending terms. In the first year, BML aims to disburse MVR 500 million in loans through the subsidiary. Over a five-year period, total disbursements are expected to reach MVR 1.9 billion, with an additional MVR 300 million earmarked over three years to support start-up ventures.

The Government has confirmed that the transition will not lead to higher borrowing costs for SMEs, and that existing interest rates will remain unchanged. The integration is expected to expand digital SME financing nationwide and improve service delivery through the use of BML’s established infrastructure.