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SME Innovation Fund

MFMC understands the funding needs of local businesses, as the private sector is primarily reliant on local bank loans as a form of funding. This represents a challenge for many local businesses, as many are unable to access credit due to sector exposures, equity contribution ratio, collateral requirements and a multitude of such factors associated with our unique economy. Further, the sizes of our local companies have been a deterrent to access funding from overseas. As such, there is a need for non-bank financing as well, as other forms of finance such as private equity finance, mezzanine financing, or structured debt instruments are vital for private sector development. The Government of Maldives under its economic agenda, is conscious of the need for investment in developing startups and SMEs to reinforce sustainable long-term economic growth.


SME Innovation Fund will make direct equity investments and structured debt injections easing access to finance and lower cost of credit for startup and SME development. The funds will support private sector start-up and MSMEs to establish new businesses and to develop existing facilities, typically for projects with socio-economic value in identified key policy areas. MFMC aims to assist businesses to grow in scale and scope, and to create new Startups and SMEs that stimulate socio- economic progress, while promoting a new narrative in inclusive growth, with emphasis towards under-served islands. While the Government or Government linked entities will be contributing equity for the funds, this alone will not satisfy the needs identified in establishing the fund management company.


MFMC seeks to raise additional investment from institutional funds, overseas strategic partners, and private investors in Maldives that are already informally acting as angel investors and venture capitalists. In addition to investment for the fund in the form of equity and/or debt, the fund requires involvement from stakeholders in areas such as startup accelerator capacity development, access to VC/investor networks, mentorship experience, finance, technology, marketing and export facilitation.


The Maldives Fund Management Company, will be taking on the risk as the General Partner, investing in new start-ups, early stage ventures with the requirement for growth capital, and established businesses requiring later-stage development capital for growth. Moreover, MFMC aims to invest in common incubator services, providing structured debt facilities for financial institutions (such as the SME Development Finance Corporation) willing to lend for micro, small and medium enterprises. The fund will consider Ethical and Environmental, Social, Governance (ESG) factors in addition to sectoral allocations within the investment decision making process, embedding sustainability as a cross-cutting theme within the core values of the business.


The fund will engage the use of business incubators (via the Business Center Corporation) to provide services such as mentorship, training and office space to businesses which are provided support by the funds. As an end result, MFMC aims to foster a culture of innovation in Maldives, that enables new start-ups, strengthens industries that are yet to achieve their true potential, and works towards inclusive & sustainable economic growth.

OBJECTIVES


-  To promote and develop the innovative and startup culture


- To facilitate investment opportunities through SME Innovation Fund


-  To provide incubator/mentorship services to innovative ideas


- To offer local investors with exposure to an additional asset class, diversified across geography and sector, at different stages of growth. 


- To provide flexible equity financing and long-term stability to start-ups with high potential, actively assisting in generating capital gains and realizing long-term value


- To assist MSMEs that stimulate socio economic progress to grow in scale and scope


- To promote a new narrative in inclusive growth, with emphasis towards underserved islands


FOCUS AREA


Information Communication Technology

Fintech 

Tourism Ancillary Services

HealthTech

AgTech

Climate Conservation

Arts & Culture 

Education Tech

Virtual Reality & Gaming

Retail Tech

IoT

Artificial Intelligence

Logistics

Transportation

Others