SDFC Launches Initiative to Transform All Loans into Shariah-Compliant Facilities

The SME Development Finance Corporation (SDFC) has launched a major initiative to convert its entire lending portfolio into fully Shariah-compliant facilities, marking a significant milestone in its transition into a fully Islamic digital subsidiary of Bank of Maldives (BML).

The transformation will begin with the introduction of the Diminishing Musharakah contract and will later expand to include other Islamic financing models such as Wakalah Bil Istithmar and Tawarruq. This move aims to enhance financial inclusion and provide innovative, ethical financing solutions tailored to the needs of small and medium enterprises (SMEs) across the Maldives.

A key part of the initiative involves converting all existing conventional loan facilities into Shariah-compliant arrangements. The conversion is designed to help customers better manage their repayment commitments, with options such as extended repayment terms to ease financial pressure and support long-term sustainability. The process will be carried out in phases, starting today, and is expected to be completed by the first quarter of 2026. Customers will be informed in batches through SDFC’s customer portal and contacted directly to ensure a smooth and transparent transition.

Commenting on the initiative, SDFC’s CEO and Managing Director, Badhurudheen Hassan, said the transformation represents a defining moment for the organization.
“This transition marks a defining moment for SDFC as we move forward towards a fully Shariah-compliant digital subsidiary of Bank of Maldives. With this new initiative, we are providing our customers an opportunity to regularize their repayments through a shariah-compliant path. Our focus is on reshaping SME financing through innovative, technology-driven solutions that are ethical, inclusive, and accessible,” he stated.

Through this strategic shift, SDFC is poised to play a leading role in advancing the digital transformation of SME banking in the Maldives. The corporation’s new direction aligns with BML’s broader vision to promote inclusive and sustainable economic development, with particular emphasis on empowering underserved segments such as start-ups, women-led enterprises, fishermen, farmers, agribusinesses, and digital and trade-based businesses.