The SME Development Finance Corporation (SDFC) has written off the interest on “Covid Business Assistance” loans and extended the repayment period to 10 years.

President Ibrahim Mohamed Solih, during a presidential election campaign event held in Malé on Thursday night, said the pandemic had caused great difficulties to the public, adding that many had requested for the elimination of interest and extension of loans given through SDFC during his door-to-door campaign visits.

“[I was asked to] Do that at the least, and we have decided on that today. Hopefully, in line with that decision, you will no longer have to pay interest on the loans taken from SDFC, and we will pay back the interest to those who had paid interest,” Solih said.

The state-owned SME Bank had disbursed a total of MVR 373 million in loans in 2020 and 2021 to provide financial assistance to businesses and the self-employed.

It remains unclear whether the decision was arrived at after a consultation within the bank or whether this was a non-consultative executive decision by the head of government.

The loans were initially issued at an interest rate of six percent, to be repaid over five years.