More than MVR 200.8 million ($13.36 million) have been disbursed under an emergency loan scheme for businesses in Maldives that have been affected by the coronavirus pandemic, the island nation’s finance minister announced Saturday.

Ibrahim Ameer told reporters that 125 large businesses and resorts have received MVR 145.7 million ($9.43 million) in local currency loans and another $2.5 million in dollar loans so far.

Out of the 423 large businesses and resorts that asked for loans, 159 were approved to receive funding, 110 were deemed ineligible, and 14 were rejected. Another 140 applications are being processed.

Meanwhile, more than MVR 22 million ($1.424 million) have been disbursed to 241 small and medium enterprises as well as self-employed individuals.

Out of the 1,680 applications received from small businesses and self-employed individuals, 640 — 466 businesses and 174 self-employed individuals — were approved to receive a total of MVR 127.1 million ($8.23 million). A total of 121 applications from small businesses and self-employed individuals were rejected.

Most of the small businesses that applied and had their applications approval were from the commerce sector, followed by the tourism, manufacturing and transport, respectively.

An MVR 2.5 billion stimulus plan, announced in March, includes MVR 1.55 billion ($100 million) in emergency loans for businesses to meet short-term working capital needs.

Under the government’s stimulus plan, emergency loans for businesses with an annual turnover of less than MVR 10 million ($649,000) and self-employed individuals are arranged through the SME Development Finance Corporation (SDFC), a state-owned financial institution exclusive for small and medium enterprises.

Emergency loans for resorts as well as local businesses with a turnover of over MVR 10 million are arranged through Bank of Maldives (BML).

Both SDFC and BML are accepting applications for the emergency finance.

The unsecured loans by BML and SDFC come with a six-month grace period and a repayment period of three years. Interest is charged at six per cent per annum, but no interest is charged during the grace period.

The government initially mandated all businesses that avail the emergency finance to retain their local workforce and pay salaries.

However, the government has since relaxed the eligibility criteria to give “a second chance” to businesses that failed to secure the finance in the first round of applications.

Under the relaxed rules, announced last week, businesses that agree to rehire axed local employees and give a monthly salary of at least MVR 5,000 ($322) will qualify for the emergency loan scheme. Those that pledge to ensure employee pay will not fall below MVR 5,000 can also apply. =

In addition to the emergency finance, the government’s stimulus plan is complemented by a package of financial measures, including a six-month moratorium on principal and interest repayments for personal, business and housing loans sanctioned by commercial banks.

The government is also subsidising utility bills.

Those that lose jobs due to the coronavirus pandemic will also be paid unemployment benefit for a period of three months.

Meanwhile, the central bank has announced a $150 million facility for banks to ensure healthy foreign currency reserves.

The facility is arranged through a $400 million stand-by currency swap signed by the Maldives Monetary Authority (MMA) and Reserve Bank of India (RBI) last year, he said.

If required, minimum reserve requirement of banks will also be slashed from 10 to five per cent to allow banks to increase lending.

The coronavirus outbreak has hit the Maldivian economy hard, as travel restrictions and other preventive measures affect the country’s lucrative tourism industry, which contributes the bulk of the island nation’s state revenue and foreign reserves.

All international airlines have suspended scheduled operations to the Maldives, as the island nation enforced a blanket suspension of on-arrival visa in late March in a bid to combat the spread of the novel coronavirus.

Even before the visa suspension, the Maldives had closed its borders to arrivals from some of the worst-hit countries, including mainland China, Italy, Bangladesh, Iran, Spain, the United Kingdom, Malaysia and Sri Lanka. Visitors from three regions of Germany (Bavaria, North Rhine-Westphalia and Baden-Württemberg), two regions of France (Île-de-France and Grand Est) and two regions of South Korea were also banned from entering the country.

All direct flights to and from China, Italy, South Korea and Iran were also cancelled.

Cruise ships and foreign yachts were also banned from docking at any of the country’s ports.

With arrival numbers falling and the visa suspension in effect, several resorts across the Maldives had been closed.

Before the pandemic, the government had been bullish about tourism prospects, targeting two million, high-spending holidaymakers this year after last year’s record 1.7 million.

However, tourist arrivals saw a year-over-year decline of 22.8 per cent in the first 10 days of March. Officials say the number of tourist arrivals to the Maldives could drop by half in 2020.

Tourism has been the bedrock of the Maldives’ economic success. The $5 billion-dollar economy grew by 6.7 per cent in 2018 with tourism generating 60 per cent of foreign income.

However, the government is at present projecting a possible 13 per cent economic contraction this year — an estimated $778 million hit.

Maldivian officials have been bullish on their ability to contain the coronavirus outbreak and reopen the country in the third quarter of the year.

The government has formulated five scenarios with possible timelines for reopening borders and the tourism sector.

The best case scenario sees the country reopen borders by May, but the most likely scenario projects a July date for reopening the borders and restarting tourism in October. In the worst case, borders may only open by January 2021.

On March 8, Maldives reported its first cases of the novel coronavirus, as two hotel employees tested positive for Covid-19 at a luxury resort in the archipelago.

Eighteen more cases — all foreigners working or staying resorts and liveaboard vessels except five Maldivians who had returned from abroad — were later identified.

A six-case cluster of locals, detected in capital Male on April 15, confirmed community transmission of the coronavirus. Several more clusters have since been identified, bringing the total number of confirmed case in the Maldives to 1,274.

Four deaths have been reported and 109 have made full recoveries.

The Maldives announced a state of public health emergency on March 12, the first such declaration under a recent public health protection law.

The public health emergency declaration has allowed the government to introduce a series of unprecedented restrictive and social distancing measures, including stay-at-home orders in capital Male and its suburbs, a ban on inter-island transport and public gatherings across the country, and a nationwide closing of government offices, schools, colleges and universities.

Non-essential services and public places in the capital such as gyms, cinemas and parks have also been shut.

Restaurants and cafes in the capital have been asked to stop dine-in service and switch to takeaway and delivery.

A nationwide shutdown of all guesthouses, city hotels and spa facilities located on inhabited islands is also in effect.