Thirty-three SMEs received €14.5 million in loans supported by the Malta Development Bank, helping maintain nearly 600 jobs in the process.
The MDB, which is fully-owned by the government, was established in 2017 with the aim of contributing to sustainable economic development.
In its second annual report, tabled in Parliament today, the bank’s chairman Josef Bonnici observed that in 2019, the MDB launched its first financial products in the SME segment, helping them access financing through two loan guarantee schemes in cooperation with the Bank of Valletta.
€14 million in loan guarantees
The first scheme was the Family Business Transfer Facility, which seeks to help support to continuity and long-term sustainability of family businesses. The MDB created a guarantee fund if €4 million, which will enable BOV to generate a loan portfolio of €10 million.
The bank also launched the MDB Guarantee Facility for Loans, through which it provides a guarantee of 80% on each eligible loan to SMEs, up to a maximum of €750,000. This scheme is aimed at SMEs that are deemed to be viable, but who are unable to obtain the necessary financing from commercial banks for various reasons, including a lack of collateral or the risky nature of the business venture.
For this scheme, the MDB put up a guarantee fund of €10 million to enable BOV to generate a loan portfolio of €50 million.
The bank also noted that discussions with another two commercial banks with the aim of launching similar schemes had reached an advanced stage.
Graduate studies supported
The MDB was also entrusted to develop a financial instrument to support further tertiary-level education, and following a call for expressions of interest, BOV was selected to implement the Further Studies Made Affordable scheme, launching the BOV Studies Plus+ programme last October.
The scheme combines grants to subsidise all interest payments of students during the study period up to 5 years, as well as soft loans of up to 15 years, backed by an 80% MDB guarantee.
By the end of 2019, the scheme had supported 56 students with €2.7 million in soft loans.