State implements loan issuance and on-lend policies

Image Source: Finance Ministry

The Maldives Ministry of Finance, on behalf of the state, has implemented policies on loan issuance and on-lend.

The ministry reports the new policies have been implemented in order to assure transparency and fair conduct in issuing loans or financing through on-lend basis.

According to these policies, state will not be issuing loans or providing funding through on-lend basis to individuals but rather will be issued for state purposes exclusively.

As per the policies, state purposes under the new regulations will be observed as projects or initiatives that benefit the community as a whole, or responsibilities that befall on government institutions or are directly related to state interests while it should promote individual needs or provide exclusive benefits to individual parties.

Furthermore, the regulations will also observe that such projects may enhance the general health standards of the public, or provide safety and security, or relates to the growth and sustainability of the country.

The Ministry of Finance also revealed that loans will be issued based on the shares or stakes owned by the state in such projects as well as following assessments on credit risk and feasibility of projects.

In addition to this, the policies mandate that interested or potential parties must request for loan to Maldives Minister of Finance, however loans will be issued with the discretion and approval of Maldives President.

Under the newly implemented regulations, policies have been made on exempting the loan repayment under specific circumstances. Loan payments may be excused or exempted with the advisory from Finance Minister, by the President of Maldives.

However, the exempted loan repayment must be shared in detail prior to one month to People’s Majilis – the Maldives parliament’s financial committee.

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