Government Expands SME Impact Fund to Create Jobs and Entrepreneurial Opportunities Outside State-Owned Enterprises

Minister of Finance and Public Enterprises, Hassan Zareer, informed the People's Majlis today that the government is intensifying efforts to create income and employment opportunities independent of the state and State-Owned Enterprises (SOEs).

As part of this initiative, financial support is being extended to Maldivian youth and entrepreneurs through a MVR 600 million SME Impact Fund, designed to facilitate the establishment and growth of private businesses.

Responding to inquiries from the Member for North Galolhu, Mohamed Ibrahim, Minister Zareer detailed that the SME Impact Fund, branded as "Kumevi," was established to broaden opportunities for youth to enter the business sector, support small and medium-sized enterprises, and facilitate job creation. The operations of this MVR 600 million fund are currently being conducted in collaboration with SME Digital.

The Minister emphasized that this initiative is a key component of the government's broader economic policy to diversify opportunities while simultaneously restructuring SOEs to ensure their financial and operational sustainability. The objective of this policy is to reduce dependency on public sector employment and empower citizens, particularly the youth, to generate income through entrepreneurship.

Minister Zareer highlighted the significance of the fund while outlining the government's strategies for job creation and SOE reform.

Statistics presented to the Parliament indicate a substantial increase in the workforce of state-owned companies over recent years, placing a significant burden on both the companies and the national budget. The number of employees in SOEs rose from 18,676 in 2018 to 36,729 by the end of the previous MDP administration representing a nearly 100 percent increase over five years. Currently, the total workforce in state-owned companies stands at 41,667.

Minister Zareer stated that, in light of the country’s fiscal situation, the Ministry of Finance has instructed the Privatization and Corporatization Board (PCB) to streamline company operations and maintain workforce levels at sustainable numbers. He noted that the primary goal is to reduce expenditures and ensure companies fulfill their core mandates.

However, the Minister clarified that the Ministry does not interfere in individual personnel decisions or the day-to-day employment matters of these companies. He further asserted that the government does not maintain a policy of dismissing employees based on political affiliation, nor has the Ministry issued any such directives.

Alongside the reform of state-owned enterprises, the government is working to expand public participation in the economy through private business ventures. The MVR 600 million "Kumevi" fund aims to provide financial assistance to SMEs, transforming entrepreneurs into job creators.

Under the SOE reform program, the government is also proceeding with the dissolution or merger of companies that are underperforming or overly dependent on the state budget. In this regard, the Maldives Sports Corporation has already been dissolved, and the process to dissolve MITDC is underway. Furthermore, the Minister noted that merging Regional Airports Company with MACL has resulted in monthly savings of MVR 10 million for the state budget in terms of personnel and operational costs.

Minister Zareer concluded by stating that the government's goal is to enhance the sustainability of state enterprises while opening new avenues for economic participation through private enterprise.

The SME Impact Fund serves as a vital tool in providing the necessary capital for youth and generating employment opportunities outside the government framework.