Industry Article

The first corporate sukuk facility was issued in the Maldives by the Housing Development Finance Corporation based on a mudarabah structure which was listed on the Maldives Stock Exchange (MSE) on the 17th February 2014. Later on, the company using the same structure issued three more sukuk that were listed on the MSE on the 6th December 2017, 22nd December 2019 and 19th December 2021. The subsequent issuances of sukuk in the Maldives were issued through Viyana, an electronic platform which is the private securities segment of the MSE.According to Chapter 11 of the Listing Rules of the MSE which became effective on the 30th June 2022, the private securities segment will be operated on Viyana by the MSE.

In a significant development, the Maldives has gained recognition as a prominent player in the global halal economy, according to the State of the Global Islamic Economy Report 2023/2024 upon analyzing the affluence of Muslim consumers and trends in Islamic economies. The report highlights the economic strength of the Maldives, emphasizing its robust GDP per capita of US$11,818 in 2022 which solidifies the nation's position in the global economic landscape, specifically within the Islamic economy. The Maldives is in 10th position in the list of top Islamic finance countries, underscoring its active role and influence in shaping the global Islamic finance sector. Additionally, global collaborations such as with the International Islamic Trade Finance Corporation have positioned the Maldives in significant trade and investment initiatives across various nations.

EyeCare, a prominent provider of eye care services, has announced the opening of subscription for its MVR30 million (US$1.94 million) sukuk offering. The sukuk issuance adheres to the principles of Islamic Shariah and is structured as a parallel sukuk istisna facility. The funds raised will be allocated toward financing the development of an eye care service center in Hulhumale, including associated parking facilities. This is the first time in the Maldives that a sukuk facility has been issued based on parallel Istisna. According to First National, the lead arranger of the sukuk, investors can expect to receive profits at an annual rate of 8% over the sukuk's five-year tenor, distributed semi-annually.

On the 1st February 2024, Maldives Islamic Bank unveiled its initiative to upgrade its flagship branch in Male', aimed at enhancing business banking services especially for individuals as well as streamlining over-the-counter cash. Key enhancements include extending business banking hours till 4pm, introducing 24-hour self-service lobby, and establishing a one-stop business banking desk to handle all non-cash requests. Additionally, to better serve business banking customers, the branch will remain open throughout the month of Ramadan and more frequently during long holidays. The Bank of Maldives (BML) announced on the 28th January 2024 that its student Kiyavaa loan (conventional) and education financing rate will be reduced to 2.5% effective from the 1st February 2024. The reduction aims to make education financing more accessible by covering up to 90% of education costs, including tuition fees and living expenses.

In a proactive move to fortify the Maldivian Zakat system, President Dr Mohamed Muizzu officially inaugurated the Maldives Zakat House within the Ministry of Islamic Affairs on the 18th December 2023. The strategic establishment, guided by Directive 18/2023 from the President's Office and authorized by Article 116 of the Constitution of the Republic of Maldives, marks a significant milestone in promoting socioeconomic well-being through Islamic finance initiatives. The newly formed Maldives Zakat House, operating under the official Dhivehi name Dhivehiraajjeyge Zakat House , is tasked with expanding the zakat fund through Shariah-approved investments to maximize benefits for beneficiaries. Designated by the number 496 in adherence to state agencies' numbering system, the institution will play a pivotal role in streamlining zakat processes and ensuring efficient disbursement.

In Q2 2023, Amana Takaful Maldives recorded a notable performance in its financial results. The total revenue for the quarter amounted to MVR89.97 million (US$5.79 million), showcasing a significant increase compared with the preceding quarter's figure of MVR53.59 million (US$3.45 million). The company's commitment to efficient cost management is reflected in the total expenses, which stood at MVR11.96 million (US$769,414), slightly higher than the preceding quarter's MVR10.79 million (US$694,146). One of the remarkable highlights is the substantial growth in net profit, reaching MVR10.47 million (US$673,559) in Q2, a considerable surge from the preceding quarter's net profit of MVR1.1 million (US$70,765.5). This robust performance translated to improved earnings per share of MVR0.52 (US$0.03), compared with the previous quarter's MVR0.05 (US$0.003). Amana Takaful Maldives's solid financial position is evident in the growth of net asset per share, which increased to MVR7.8 (US$0.5) from the preceding quarter's MVR6.77 (US$0.44). The cash flow per share was reported at MVR0.23 (US$0.01), showcasing a reduction compared with the previous quarter's MVR0.45 (US$0.03).