DTIS, Volume I - Enhanced Integrated Framework (EIF)

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• The State Bank of India has a 30 per cent share of the market. Its loan portfolio comprises 60 per cent for tourism sector investments, 15 per cent fishing sector investments, 10 per cent for import-export trade, and 10 per cent housing and education. In 2005, the bank had over US$ 100m invested in the Maldives and was anticipating a major increase in 2006 with the commencement of a new tourism resort development. • The Bank of Ceylon has 20 per cent share of the local market. It is Sri Lankan owned and a major part of its operations is concerned with trade financing, Sri Lank being the Maldives major trading partner. It loan portfolio includes 48 per cent for commercial transactions and 38 per cent for tourist operations. The bank also has strong links with its Mauritian office especially for tourist sector transactions. • The Habib Bank is Pakistani-owned and relatively small with 10 per cent share of the local market and about 15,000 account customers, 90 per cent of which are based in Male and the rest in the atolls. It is not involved in relatively small loan transactions preferring transactions that are over US$ 5 million. • HSBC is the latest bank to arrive in the Maldives, but due to a very active campaign and novel ideas for credit, has already captured 20 per cent of the local market. Its credit facilities are popular being based on cash flow forecasting to determine credit worthiness rather than requiring collateral with asset based calculations. Eighty per cent of HSBC business is focused on short-term operating capital requirements and bridge finance. These services are augmented by easier arrangements for international payments by drawing upon the bank’s extensive international network. ATOLL DEVELOPMENT FUNDS The BML has a development banking section through which atoll development funds are managed under the direction of Atoll Development Committees. There are six atolls that are currently involved in Atoll Development Funds (ADF) which are located in Vaavu, Shaviyani, Noonu, Laamu Lhaviyani and Kaafu. These funds were initially established as part of the South Asian Poverty Alleviation Plan (SEPAP) in 1995. The government, the local community and UNDP financed the funds in roughly equal proportions. Since its establishment, the funds have achieved growth by revolving the initial investment. Typical loans are for Rf. 15,000 (around USD1, 300) without collateral to Rf. 50,000 (USD4200) with collateral for periods for 3 to 4 years at interest rates of 10 per cent (reduced to 6 per cent specifically for post-tsunami livelihood recovery loans). Loans are normally for SME development, but can be used for the purchase of household items. It was reported that at present there is a 95 per cent recovery rate on all loans. 61
The cash is held and disbursed by the Bank of Maldives (BML) on the approval of the ADC. The BML reported that at in mid-2005, there were 22,400 loans totaling Rf 468 million (USD39 million), of which only 20 per cent accounts for the original capital. UNDP is seeking to increase the funds available as part of the post-tsunami National Regional Recovery Plan by USD 50,000 to USD 300,000 per ADC, depending on the need. LEASING There is only one leasing company in the Maldives – the Maldives Finance Leasing Company (MFLC) that was established in 2002 as a joint venture between NDVB - a Sri Lankan company, IFC of the World Bank Group, the Government of Maldives, the Maldives Transport and Contracting Company (MTCC), and private investment partners. The current portfolio is around US$ 11million, with expansion planned in the near future. Over 90 per cent of the portfolio is for fishing vessels and other “movable objects” e.g. vehicles, equipment, computers. No leasing is anticipated for ocean-going vessels or aircraft. The maximum exposure on a single lease is US$ 500,000, for four to five year period. Lease agreements require a minimum 20 per cent down payment. Interest rate is between 9.5 and 11.5 per cent. At the end of the lease period a nominal payment is made to release the ownership from MFLC. CAPITAL MARKET DEVELOPMENT AUTHORITY In 2002, a Capital Market Development Authority (CMDA) was established within the MMA, as a first step in the development of a stock exchange and securities market. This is viewed as a means of engaging potential investors so that funds currently residing in low yield deposit accounts are mobilized as equities in local companies. At present three majority-state-owned companies are listed with a limited turnover of the publicly traded shares. As there is no tradition in stock investments and trading, the CMDA has established an investment education unit. INSURANCE Allied Insurance Company (AIC), a joint venture between government and the private sector including MFLC dominates the insurance sector with a 60 per cent market share. The company offers a complete range of risk insurance services, but is not currently supplying life or health cover. Total coverage within the Maldives amounts to US$ 1 billion, with annual premium income of US$ 3.5 million, as confirmed to the <strong>DTIS</strong> team. After the Tsunami, natural risk elements in policies were increased by 30 per cent even though there were many uninsured losses. There is no compulsory insurance in the Maldives (even for third party liability). However, it was noted that investments in the tourism sector are covered for most risks 62
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FINAL R E P O R T Volume 1 MALDIVES
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GSP HACCP HDFC HDI HIES HH HRD HS I
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TRIPS TRTA TSA TTMP UAE UK UNCTAD U
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CHAPTER 6: CUSTOMS SERVICES AND TRA
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major stakeholders as the basis of
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C. ECONOMIC TRENDS Buoyant GDP grow
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WTO members (through the Committee
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The recommendations cover these iss
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Requirements Action no. Action reco
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government, and lawmakers are elect
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. 4
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to Sri Lanka. However, by 2004 the
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This relatively high proportion of
Page 33 and 34: On an annual basis, total NFA of th
Page 35 and 36: elow provides data on the public in
Page 37 and 38: According to the estimates prepared
Page 39 and 40: Table 2.8: Damage to agricultural f
Page 41 and 42: II. Imports - Merchandise There has
Page 43 and 44: the relatively high rate of unemplo
Page 45 and 46: A. DESTINATION OF MERCHANDISE EXPOR
Page 47 and 48: Penetration of international market
Page 49 and 50: Overall, the importance of foreign
Page 51 and 52: on goods deemed luxury goods (e.g.
Page 53 and 54: the Japan and USA markets. 11 Fish
Page 55 and 56: The Modalities provide that the res
Page 57 and 58: emoved. However, in order to provid
Page 59 and 60: EBA. Appropriate transition arrange
Page 61 and 62: Several provisions such as Article
Page 63 and 64: CHAPTER 4 POVERTY REDUCTION AND HUM
Page 65 and 66: Table 4.2: Poverty Gap Ratios per R
Page 67 and 68: produced locally and are readily av
Page 69 and 70: commerce, information and communica
Page 71 and 72: Table 4.3: Fishery Sector employmen
Page 73 and 74: This also requires policies that ta
Page 75 and 76: with routine functions of administe
Page 77 and 78: Applying for a license to invest in
Page 79 and 80: E. MINISTRY OF FISHERIES, AGRICULTU
Page 81 and 82: K. PRIVATE SECTOR STAKEHOLDERS Priv
Page 83: Overall, it is estimated that the c
Page 87 and 88: difficult to reach given the except
Page 89 and 90: system of micro-credit intermediari
Page 91 and 92: F. LAND, RAW MATERIALS AND SUPPLIES
Page 93 and 94: B. LABOUR MARKET REFORM About 44 pe
Page 95 and 96: Appendix The mixed record of the Ma
Page 97 and 98: legislation incorporates the initia
Page 99 and 100: CHAPTER 6 CUSTOMS SERVICES AND TRAN
Page 101 and 102: Maldives Port Authority • Respons
Page 103 and 104: the correct amount of customs duty
Page 105 and 106: suspense procedures, thus eliminati
Page 107 and 108: A new domestic terminal at MIA will
Page 109 and 110: There is need to clarify MAC’s na
Page 111 and 112: Changes in the role and structure o
Page 113 and 114: Significant improvements have been
Page 115 and 116: CHAPTER 7 THE TOURISM SECTOR Chapte
Page 117 and 118: British market in 2001. In 2004, be
Page 119 and 120: Similarly, considerable demand was
Page 121 and 122: for imports of support infrastructu
Page 123 and 124: government revenues from the supply
Page 125 and 126: number of trainees that have been t
Page 127 and 128: established as a quality tourism de
Page 129 and 130: Maldives' unspoiled marine environm
Page 131 and 132: The Faculty works very closely with
Page 133 and 134: TOURISM ACT A key objective of the
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HRD studies and conduct of necessar
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D. ESTABLISH AN ENABLING BUSINESS E
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Main Recommendation No. 5: review a
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Main Recommendation No. 6: Scale-up
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CHAPTER 8 FISHERY SECTOR Chapter Pl
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processing under-performing more th
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per cent - see Table 8.4. The secto
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In the light of these market trends
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documentation, and administration.
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monitoring and evaluation dates fro
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and catering industry chefs demand
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It is expected that the trial fishe
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• Can seaming and retorting; •
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DTIS, Volume I - Enhanced Integrated Framework (EIF)

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