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Shahtaj Mahmud

Paving the Way for the Marginalized in the Maldives

Author: Shahtaj Mahmud


The Maldives economy is constrained by a combination of binding factors, such as geographical isolation, small population, limited infrastructure, and a multitude of inefficiencies that increase the cost of doing business and reduce profitability and growth. Inefficiencies in business value chains, absence of business support services, and limited access to financial services constrain broad-based development and reduce incentives for small businesses in the Maldives, particularly those living in the outer atolls including youth and women, to engage in business enterprise.

For Maldives to have a more inclusive and broad MSME sector, Asian Development Bank (ADB) intends to further strengthen the MSME sector. In order to do so, the business infrastructure has to be augmented through development of business support infrastructure capacity. Access to finance is another area that hinders the development of the Maldivian MSME sector. ADB’s intervention also targets enhanced access to finance through an additional line of credit facility (LCF) funds, developing a Credit Guarantee Scheme (CGS), strengthening the Credit Information Bureau (CIB), and implementing a Secured Transaction Registry (STR). In fact, the MSME sector of the Maldives is also in need of enhanced access to information through a comprehensive MSME portal and establishment of citizen service centers.

Figure. Problems Faced by Women Entrepreneurs

To facilitate a healthy MSME ecosystem, the program with support from e.Gen will contribute to a series of capacity building and institutional strengthening measures in the following areas:

  • Knowledge support – provides MSMEs with the awareness, information, technology, and know-how to grow their businesses.

  • Financial services and investment support – provides MSMEs with access to needed financial backing to start and grow their businesses.

  • Incentives support – provides a supportive environment for business growth through elimination of barriers, motivation and rewards for performance and positive externalities.

  • Business development services (BDS) support – provides the periodic guidance, advise, mentoring assistance and ad-hoc support that is much needed for MSMEs to survive, grow and excel.

In fact, the program has received commendable success after its implementation. Access to low-cost financing with limited collateral requirements has inspired many women to start family businesses in beautiful Maldives.


Figure. Results of ADB’s intervention with support from e.Gen

Even though Maldives has introduced positive policy reforms and initiatives for the development of MSMEs, there are still constraints that impede the growth of the MSMEs in Maldives. The country faces shortages in human skills and resources causing only a handful of women to be employed. The poor, including women and youth, has very limited access to skills development and vocational training programs which could result in identification and creation of entrepreneurial opportunities. Mentoring and supporting existing entrepreneurs can serve as potent encouragement for the most vulnerable and marginalized sections of the Maldivian society, especially youth, women and disadvantaged groups leading to an increase in the number of entrepreneurs and a rapid economic climb.



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