Amna outreach program

MHI/ HDFC Islamic facility for Housing in the islands of Maldives  

16th February 2014
gethoruverikurunMinistry of Housing and Infrastructure (MHI) has introduce an Islamic financing scheme for islanders, with an annual contribution of MVR100 million from the state budget, in association with the Housing Development Finance Corporation (HDFC).



Traditionally, allocation of land plots for housing has been the method adopted to solve housing issues in the Maldives. It was expected that the people would have the means to save or raise funding to develop decent housing on the land allocated to them. However, the constraints associated with availability of affordable finance for housing has impeded achieving a solution to the housing development needs. The issue of vacant land plots remaining undeveloped for long periods in populated islands where young families were compelled to share accommodation with their family members gave an indication that there was a segment of society who were unable to fulfill their housing needs without an initiative from the state and financial institutions who would be dedicated to providing an affordable solution.

Maldives is composed of many islands with a dispersed population, which has been growing over the years, which has led to scarcity of land in the urban centers. The ensuing issues related to human congestion with multiple families living with constraints of space, and substandard housing have been highlighted by the Human Rights Commission of Maldives (HRCM),which has reported that a severe problem of a crisis proportion exists in many urban centers. In the rural segments in far-flung islands, access to housing finance for the lower income segment of society remains a pressing challenge.
With the intention of meeting this challenge to improve living conditions through affordable finance for development of decent homes, the Government of Maldives is launching a pilot project with the assistance of the Islamic Window of HDFC PLC to offer an Islamic financial solution through HDFC Amna. With a profit margin as low as 3% pa, the Government of Maldives will provide funding for HDFC Islamic Outreach Program to ensure financial inclusion of the underserved low income segment of the nation.  

Objectives of Islamic Facility Housing Scheme are:
*    To fund the construction of homes on behalf of lower income groups already with allocated land, who will now be offered an affordable repayment method under an Islamic Mortgage Facility
*    To provide financial assistance for the people who are entitled a land plot in their island but unable to build a home as they do not have access to finance
*    To assist the Maldivian Citizens in outer islands to complete housing construction projects, which remain incomplete due to lack of finance.
*    To develop homes for the youths and newly married couples who will become independent homeowners.
 Terms and Conditions Governing this Islamic Facility:
1.    The Scheme is a pilot project by the government to facilitate the construction of houses in the islands
2.    This Facility calls for applications from those meeting the eligible criteria given below for a minimum housing construction/completion value of MVR 100,000 and a maximum of MVR 400,000
3.    Maximum period for repayment is 20 years
4.    During the period of construction, HDFC Amna will be funding the contractors directly (no funds are disbursed to the customer under principles of Islamic Finance) and repayment of 50% of the monthly instalment will be paid for a maximum period of one year or earlier if the delivery of the completed housing unit is possible.
5.    30% of the scheme is allocated for the age group of 18 to 34
6.    The completed home will be delivered on land that has to be mortgaged to HDFC PLC.

Eligibility Criteria for the Scheme
1.    The applicant should not have a completed house under his/her name
2.    Currently living in a house belonging to a family member or friend
3.    Applicant must have permanent registration on the island
4.    Applicant must have an allocated land plot in the registered island
5.    Applicant should not have permanent building on the land allocated (permanent building is considered as a building that has been constructed using concrete or masonry. A building made of Thatch, G.I Sheets or plywood, or half built (or semi built) buildings are not considered as permanent buildings) However this facility allows for application to complete housing construction projects that are left incomplete.
6.    The eligibility of the facility will be limited to applicants who have resided on the island where they have registered for more than 3 years (exception given for the citizens of islands selected for consolidation by the government). Priority will be given to newly married couples, and single parents who have no other means of housing.
7.    The applicant family income should be between MVR 6,500 and MVR 10,000 (‘Family’ means immediate family)
8.     If two or more applications are submitted for the same land plot under different names, the facility will be provided only to one applicant based on the criteria and eligibility.
9.     The applicant must not have selected any means of housing under any prior government social housing scheme in the country.
10.    Must be over 18 years of age.