MDP's manifesto has proposed setting up of an SME Islamic Bank to provide Islamic finance and other services.

President Ibrahim Mohamed Solih unveiled his economic manifesto and policy during a special campaign event held on Thursday. This is the last of the five policies outlined in President Solih's election manifesto.

As per the policy outlined in the MDP manifesto released this evening, a new Tier-1 SME Islamic Bank would be established and provided with Islamic finance and other financial services in accordance with Shariah principles, and the stock market would be further developed to enable businesses and investors to reap full benefits of the financial market. It plans to expand Islamic financing specifically for small businesses and introduce more products.

There are several measures to improve the regulatory system to provide more financial support and protection to small businesses by further simplifying the criteria for banks in lending to them, introducing an alternative credit scoring system for businesses, and providing more financial support and protection to small businesses. The policy also seeks to expand services by setting up branches of SME Development Finance Corporation across the country.

It will also introduce products such as green finance (such as renewable energy) and social impact bonds for eco-friendly businesses in the form of innovative finance, and set up a "crowd funding mechanism" through a separate platform to connect small and medium enterprises and startups with investors.

In order to provide financial assistance to the smallest businesses, the provision of financing without a guarantee and equity has been expanded and microfinancing schemes will be introduced to provide financial assistance to more people accordingly, under which special priority will be given to women and youth working at home.

The policy seeks to expand existing grant programs specifically for individual and domestic workers to monitor and take them to greater heights. In addition, to take small and medium enterprises to greater heights, business incubation/accelerator programs should be expanded to provide administrative, innovative, technical, and financial support.

The policy also seeks to create more and large spaces for businesses such as the SME hub, release them to low-cost businesses, and allow online businesses operating in the international market to pay US dollars as merchant currency.

In order to provide relief to small businesses and self-employed people, businesses earning less than MVR 2 million will be exempted from goods and services tax and income tax and a system of special, compliance cost, administratively convenient, presumptive tax will be introduced for them. The policy also seeks to provide modern payment service services through the government to reduce fees for all local businesses.