In light of the effects of the coronavirus pandemic on the Maltese economy, the EIB Group (European Investment Bank – EIB and European Investment Fund – EIF) has signed an agreement with the Government of Malta and the European Commission to increase financing available under the SME Initiative in Malta.
The agreement was signed today by Alain Godard, EIF Chief Executive; Miguel Morgado, EIB Director; Hon. Stefan Zrinzo Azzopardi, Parliamentary Secretary for EU Funds within the office of the Prime Minister; and Paul Zahra, Permanent Secretary for EU Funds within the Office of the Prime Minister.
The SME Initiative entails the combined use of European Structural and Investment Funds, the Horizon 2020 programme and EIB group funds.
So far, through the SME Initiative in Malta, Bank of Valletta and BNF Bank have assigned a target portfolio of nearly €90 million for new SME financing in the form of loans across the country. Due to the successful uptake of this initial agreement and the coronavirus pandemic, the Maltese authorities, the EIB Group and the European Commission have decided to add additional resources to this initiative. This will trigger additional €28 million of SMEs financing under advantageous terms, such as reduced interest rates and improved collateral requirements, thus increasing the target portfolio up to EUR 118m.
Malta has contributed up to €29 million from its European Regional Development Fund (ERDF) dedicated envelope. The €29 million will be leveraged with commercial lending through a risk-sharing mechanism.
Commenting on the signature, Elisa Ferreira, European Commissioner for Regional Policy and Structural Reforms, said: “I welcome Malta’s decision to increase the available financing under its SME initiative programme as a measure to support local Small and Medium sized enterprises facing the effects of the coronavirus pandemic. This is a smart move that will directly benefit Maltese small and medium-sized businesses and entrepreneurs giving them the financial boost they need to overcome the side effects of the pandemic outbreak, turning their ideas into concrete projects or expanding beyond their local markets.“
