Maldives Association of Travel Agents and Tour Operators (MATATO) on Thursday called on banks operating in the Maldives to lower their charges and fees in order to support Small and Medium Enterprises (SMEs).

In a statement, the non-profit said the lobbying efforts were carried out during the Maldives Financial Expo 2017, organised by the central bank.

At the opening day of the three-day expo, MATATO cited several studies, including a recent survey funded by UNDP, and told bank officials that local travel agents contribute to about 25 percent of total tourist arrivals to the Maldives. Together with guesthouses and safari boats, they have a combined market share of close to 40-50 percent of total arrivals to the country, it added.

“But the support these sectors get from banks in the Maldives is very limited,” the statement read.

MATATO pointed out that interest rates for SMEs are too high as 9-11 percent is not feasible for most small businesses. Despite acknowledging the Credit Guarantee Scheme initiated by Maldives Monetary Authority (MMA), the association stressed that the requirement of high equity and collateral has been another challenge.

The issue of high bank charges for inward remittances, withdrawals, card transactions, merchant trade services and cross border transactions was highlighted as well, with the central bank’s support sought to intervene and regulate the banking sector with a view towards helping local travel agents, guesthouses and liveaboards.

“The association also asked the support from MMA to help foreign banks in the Maldives to support small businesses than rather focusing on only high net worth clients,” the statement read.

After years of double-digit growth in tourism, the Maldives has over the recent years observed a slowdown in growth despite recent gains. Tourist arrivals have crossed the one million milestone and is on course to reach 1.5 million by the end of this year, but the country has been struggling to create demand amidst a significant increase in bed capacity.

Over the past three years, dozens of uninhabited islands have been leased to local and foreign resort developers. Several international brands have entered into the market, increasing the number of resorts to 120. That number is set to increase as the government has announced the opening of some 20 new resorts by the end of this year.

Along with the new resort openings come the challenge of increasing demand from budget travellers who choose guesthouses over luxury resorts that the Maldives is known for. The guesthouse sector has rapidly expanded with over 300 guesthouses in operation today.