About the Client 

The Government of the Maldives, through the Ministry of Finance and the Maldives Monetary Authority (MMA), is leading national efforts to diversify the economy and expand opportunities for small and medium-sized enterprises (SMEs).  

The Ministry of Finance is responsible for ensuring a sound macroeconomic framework by managing fiscal and debt policies, preparing the national budget, and overseeing state assets, while also fostering conditions for sustainable private sector growth. 

The Maldives Monetary Authority, established in 1981 as the country’s central bank, regulates the financial sector with the mandate to maintain price stability, safeguard financial stability, and support national economic development.  

This work forms part of the Maldives Competitiveness and Growth Project (MCGP), a World Bank financed initiative implemented by the Ministry of Finance. The MCGP is designed to enhance national competitiveness by accelerating State-Owned Enterprises (SOE) reforms and fostering SME development through improved digital financial infrastructure and business advisory services.  

Challenge 

SMEs form the backbone of the Maldivian economy, contributing to employment, innovation, and service delivery across the country. Despite ongoing digital transformation, SMEs face significant challenges in accessing affordable financing.  

The lending services offered by the banks and lending companies are often restrictive, requiring collateral and complex application processes that deter many SMEs. Collateral-free and performance-based financing options, typically offered by fintechs and non-banking lenders in other markets, remain limited in the Maldives.  

Additional barriers include:

• Low adoption of digital ledgers and payment systems  

• Limited interoperability across financial platforms

Fragmented regulatory capacity

Stakeholders across the ecosystem, including financial services regulators and providers, such as commercial banks, non-banking lenders, electronic money institutions; the Ministry of Trade and Economic Development; the Business Centre Corporation (BCC); and business solution providers, have recognized these barriers as significant constraints to SME competitiveness and national growth.  

Solution and Benefits

The client was looking for solution to: 

• To improve access to financing through cashflow-based lending  
• Reduce reliance on collateral  
• Simplify and speed up loan processing  
• Expand adoption of digital payments and KYC solutions
• Strengthen regulatory capacity at MMA
• Improve transparency and trust in SME lending  

For achieving those goals, the Ministry of Finance and the Maldives Monetary Authority (MMA) initiated a project and chose NRD Companies as a partner to evaluate the readiness of both SMEs and the financial sector to adopt digital and performance-based lending models, and identifying the steps required to strengthen the financial ecosystem. 

NRD Companies’ Services Provided

NRD Companies delivered a full-scale assessment through the following activities: 

• Comprehensive as-is analysis of digital payments, digital ledgers, lending practices, and regulatory capacity, including identification of legal, organizational, and technical gaps  
• Surveys, consultations, and validation workshops with SMEs, financial institutions, and government agencies  
• Evaluation of emerging digital solutions, such as the Favara instant payment system, Open Banking initiative, and eFaas Digital ID platform  
• Technology provider mapping to identify infrastructure enabling real-time access to business data  
• Roadmap preparation for further development of a resilient, inclusive, and scalable digital financial infrastructure for SMEs.  

Results Expected

The project lays the foundations for future reforms, that once implemented, are expected to: 

• Enable cashflow-based lending and reduce collateral dependency
• Shorten loan processing times and increase efficiency in credit assessment  
• Reduce administrative burdens for SMEs and lenders 
• Support the use of alternative credit scoring models and data sources  
• Expand SME adoption of digital payments, ledgers, and KYC solutions  
• Enhance MMA’s regulatory and supervisory capacity  
• Increase financial inclusion, competitiveness and resilience across the SME sector  
• Enhance transparency and trust in SME lending  

Replicability 

The approach demonstrates a replicable model for Small Island Developing States (SIDS) and other emerging economies facing similar financing challenges. By combining regulatory reform, digital infrastructure development, and active SME engagement, the methodology can be adapted to strengthen financial ecosystems in diverse contexts.

SDGs Addressed 

SDG 8: Decent Work & Economic Growth

By expanding SME access to finance, employment opportunities were strengthened and entrepreneurial activity enhanced.  

SDG 9: Industry, Innovation, and Infrastructure 

By developing a modern and interoperable digital identity ecosystem, the project strengthened Samoa’s foundational digital infrastructure. It enabled more efficient government operations, supported innovation in service delivery, and laid the groundwork for resilient digital transformation aligned with national priorities. 

SDG 10: Reduced Inequalities 

The strategy promoted inclusion by ensuring that all citizens – especially those in rural and outer island communities – had access to legal identity and essential public services. This helped close the digital divide and ensured that no one was left behind in Samoa’s development journey. 

SDG 17: Partnerships for the Goals 

The project exemplified effective collaboration between international donors, national institutions, and expert technical partners. This partnership model demonstrated the power of coordinated action in driving sustainable digital development and identity inclusion. 

Through this strategy, Samoa took a decisive step toward building a future where every individual was counted, protected, and empowered to participate fully in society – regardless of geography or circumstance.