The Maldives has agreed a new five-year trade-finance framework with the International Islamic Trade Finance Corporation that could mobilise up to US$1.5bn for public and private-sector trade between 2026 and 2031.

The agreement gives the import-dependent island economy a renewed financing channel for essential and strategic commodities while widening ITFC support beyond state procurement to private companies, SMEs and local financial institutions. It was signed in Malé by Maldives Finance Minister Hassan Zareer and ITFC chief executive Adeeb Yousuf Al-Aama.

Financing under the framework can support both imports and exports. Eligible uses include trade by state-owned enterprises and private-sector companies, with additional financing lines expected to be established through Maldivian financial institutions. That structure could allow banks to intermediate ITFC liquidity into smaller businesses rather than concentrating support exclusively in large government-linked transactions.

The arrangement builds on an existing relationship in which trade finance has been used to secure petroleum, staple foods, medical supplies and construction materials. State Trading Organization has received a rollover facility from ITFC since 2017 to support bulk procurement of essential commodities, giving the country a source of liquidity between purchasing imports and recovering cash through domestic sales.

The scale of the new framework broadly maintains the financing relationship established under the previous five-year agreement. ITFC approved US$1.7bn and disbursed US$1.5bn to the Maldives during the framework that ran from 2019 until October 2024. Since ITFC began operations in 2008, approvals for the country have exceeded US$3.3bn.

For trade financiers, the new agreement is notable because it combines sovereign-linked commodity funding with a route into private-sector and SME finance. The framework itself is a maximum programme envelope rather than US$1.5bn of funding already drawn, and individual transactions will still need to be originated and approved.

If fully utilised, however, it would give the Maldives substantial capacity to smooth the working-capital demands created by importing essential goods while also extending trade liquidity deeper into the domestic financial system.