The Japan International Cooperation Agency (JICA) signed a loan agreement with the Bank of Maldives Plc of the Republic of Maldives on March 27, 2012, for a US$13 million overseas investment loan to finance a tourism-related business in the Maldives. This is JICA’s first overseas investment loan to the Maldives and will be co-financed by the Asian Development Bank (ADB) and the Austrian Development Bank (OeEB).
Known as the “Pearl Necklace of the Indian Ocean,” the Maldives is blessed with rich natural tourism resources unique to an island nation. The Maldives has developed tourism as its core industry, and tourism-related industries, including accommodation and food services for tourists, are estimated to account for about 75% of the country’s GDP, playing an important role in the economy and society from the perspective of employment. However, due to the spread of the new coronavirus infection, the number of overseas tourists in 2020 decreased by approximately 70% from the previous year, and local tourism-related businesses were hit hard. The challenge is to expand financial services to tourism-related businesses in order to resume economic activities in the future.
This loan will improve access to finance for businesses by supporting the expansion of lending to tourism-related businesses through the Bank of Maldives, the largest financial institution in the Maldives. The loan will focus on small and medium enterprises (SMEs) and women-owned businesses, which are considered to have particular challenges in accessing finance, and will contribute to Goal 5 (Achieve gender equality), Goal 8 (Achieve job satisfaction and economic growth), and Goal 17 (Achieve the goals through partnership) of the SDGs (Sustainable Development Goals). In addition, this project will contribute to women’s financial services. In addition, an action plan for improving women’s access to finance has been prepared for this project, which will contribute to the “2X Challenge: Finance for Women” (*1), an initiative for the economic empowerment of women undertaken by G7 development finance institutions.
Japan and Maldives will celebrate the 55th anniversary of the establishment of diplomatic relations in 2022, and JICA will work to further strengthen the relationship between the two countries through this project, based on the trust that has been built between Japan and Maldives, and will continue to develop cooperation for the development of the Maldivian economy and society.
(*1) 2X Challenge: Finance for Women
The initiative was adopted by national development finance institutions, including JICA, at the G7 in June 2018. 2X sets a goal of doubling the volume and impact of investments in women. 2X has indicated a goal of doubling the amount and impact of investments in women.
© Source JICA