A new scheme being administered by Bank of Valletta will provide €60 million worth of financing for over 800 Maltese SMEs.
The scheme, first mentioned by Parliamentary Secretary for EU Funding Ian Borg in December 2014, was announced earlier this week. It is being offered following an agreement between BOV and the European Investment Fund, part of the European Investment Bank Group.
The agreement means SMEs will be offered financing of up to €500,000 at lower interest rates with less stringent collateral requirements.
The scheme – SME Initiative Malta – is a joint financial instrument of the European Commission, EIB Group and the government of Malta and aims to stimulate SME financing by providing partial risk cover for SME loan portfolios originated by financial institutions. Alongside €15 million from its EU Structural and Investment Funds resources contributed by the government of Malta, the SME Initiative is co-funded by the EU through Horizon 2020 resources, as well as EIB Group resources.
BOV had previously leveraged the guarantee put up by the government for Jeremie – €10 million originally, with another €2 million put up later – by almost six times. During the period of the instrument, over 700 loans were granted, amounting to €62 million. This time, the leverage is four times the government guarantee.
In December 2014, Mr Borg had said that unlike with Jeremie, it was "probable" – and preferable – that more than one bank would be able to offer the SME initiative.
Read more about the SME Initiative
(Source: Times of Malta)
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