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SME Development

The new administration recognizes the potential of the Small and Medium Enterprise (SME) sector in creating a more resilient and diversified economy as well as creating more employment opportunities, particularly in the outer atolls. It envisages establishing the requisite institutional and organizational mechanisms to restructure and consolidate all SME Development activities in order to achieve economies of scale and efficiency of operations. Furthermore, it is also exploring the option of pooling all funds allocated for development of SMEs and related activities under the aegis of a single entity with responsibilities for providing the various services needed for SME Development in the country across sectors. 

SME Policy

Government’s SME Policies are summarized below:

  1. Provide SMEs with subsidies to minimize the difference between the rich and the poor and to encourage a business environment that will extend more economic benefits to the public.
  2. Establish an institution and develop human resources required for the development of SMEs within the Food Security sector.
  3. Create more opportunities for SME participation in the three main industries, tourism, fisheries and agriculture, through the formulation of relevant policies. Assist and facilitate SME participation in agriculture, transport and and infrastructure development sectors.
  4. Provide technological capacity for SMEs to expedite the growth and development, given that the development of SMEs is crucial to economic progress.

Short term goals (1-3 years)

  1. Facilitate the growth and development of SMEs through the development of human resources.
  2. Encourage the participation of women in the SME sector.
  3. Revive the crafts industry by utilizing modern machinery and facilitate the trade of local souvenirs in the tourist market.
  4. Give priority to SMEs when awarding regional government contracts.
  5. Formalize the SME sector and facilitate for the registration of SMEs at the regional administrative centers of the country to further expedite the registration process for the start-up SMEs.

Long term goals (1-5 years)

  1. Promote local products in the domestic market and facilitate their export.
  2. Establish a training facility for those wishing to establish and promote SMEs in the Faculty of Management and Computing.
  3. Facilitate access to low-interest loans for the SME sector and provide technological support training and assist in marketing and promotion.
  4. Support and develop traditional crafts practices in the atolls.


SME Classification


To enable a more focused approach in implementing the government’s SME policy and with alliance with SME Law, all SME related government assistance will be channeled to MSMEs classified with the Ministry of Economic Development. 


The main objectives of classifying SMEs include:

  1. To have a standard reference for recognition of micro, small and medium enterprises in the Maldives which will in-turn enable better targeting of technical and financial aid given by the government and international organizations for the development of SMEs

  2. To aid selection of small business which requires government support service and financial assistance based on pre-defined criteria.

  3. To enable information collection and research on SMEs in order to monitor their activities to make strategic policy decisions.


The classification for Micro, Small and Medium Enterprises (MSMEs) in the context of SME Law is given below:


Category

   Full time employees

 Annual Income/Turnover

Micro Enterprise

5 - 0

500,000 – 0

Small Enterprise

30 - 6

5,000,000 – 500,001

Medium Enterprise

100 - 31

20,000,000 – 5,000,001


For SME’s to be classified, it has to be registered with the ministry in some form; for example, as Sole Proprietorship or as a Partnership or as a Company.

 



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