News DeskIn a practical move aimed at assisting borrowers, the Bank of Maldives (BML) has decided to lower overdue interest rates, effective from January 24th, 2024. The reduction, from 2% to 0.5%, signifies a measured approach to support businesses and individuals facing economic challenges.
BML has adjusted overdue interest rates, making them more manageable for borrowers. This follows a previous reduction from 10% to 2% in April. Overdue interest, a penalty for delayed loan payments, has been a persistent concern for borrowers in the Maldives.
The reduction aims to alleviate financial pressure on borrowers. The revised rates strike a balance between protecting the bank’s interests and offering some financial breathing room for those facing challenges in repaying loans.
Loan Landscape in the Maldives:
Maldives Monetary Authority (MMA) data reveals that banks and financial institutions have disbursed loans amounting to MVR 40 billion. These loans have been issued to private businesses and individuals, with the tourism sector receiving the largest share, followed by the construction industry.
Loan Distribution Across Industries:
- Tourism: MVR 12.4 billion
- Construction: MVR 7.7 billion
- Personal loans: MVR 5.7 billion
- Business: MVR 4.8 billion
- Transport and Communications: MVR 3.7 billion
Yearly Trends:
MMA’s January statistics show a steady increase in loan disbursements over the past five years, with 2023 witnessing the highest total value of loans at MVR 4.6 billion. Notably, the tourism industry has been a significant recipient, receiving MVR 3.9 billion during this period.
Year wise Loan Issuance:
- 2019: MVR 1.9 billion
- 2020: MVR 2.8 billion
- 2021: MVR 2.3 billion
- 2022: MVR 2.1 billion
- 2023: MVR 4.6 billion
Impact on the Economy:
The statistics underscore the importance of the tourism industry, which not only receives the largest share of total loans but also plays a crucial role in the Maldives’ economy. Personal loans, amounting to MVR 3.5 billion, represent the next largest sector.
