Parliament is considering ways to reduce the interest rate of business loans provided by banks, according to Kinbidhoo Constituency MP Mohamed Nashiz.
Speaking on the PSM’s ‘Baabu’ program, MP Nashiz said that Parliament’s Public Accounts and SOE Committees are discussing ways to reduce the interest rate of business loans provided by banks.
He said that most loans are secured through a deposit and the process is too long. He also said that the risk calculation process currently used by banks include too much legal proceedings in the recovery process, thus it contributes to a higher interest rate.
He further criticized that local banks have too high interest rates compared to other countries and it shuns the opportunity for business growth because businesses are working to pay back the loan instead of working to develop the business.
MP Nashiz said the committee has gathered enough research and data on interest rate and the high cost of capital. He further added the importance of finding a solution to this issue through proper regulation after discussing with relevant parties.
MP Nashiz previously failed to pay back his million dollar loan from Bank of Maldives to finance his Funaddoo Tuna Products venture which also ended up cost his parliamentary constituency back in 2013.