Malta Development Bank guarantee scheme has so far helped 251 enterprises

A scheme valued at almost €800 million in guarantees on loans provided by the Malta Development Bank has so far aided 251 enterprises – ranging from hotels to retail outlets – and these altogether provide employment for some 15,000 persons. The Bank’s Chairperson, Professor Josef Bonnici, said these enterprises made use of over €200 million in guarantees to enable them to continue despite financial complications caused by the pandemic.

The pandemic has crippled many enterprises because of substantial drops in income with many having to resort to bank loans to enable them to pay wages, rents, outstanding bills and other expenses.

During the height of the pandemic the Government allocated a guarantee fund of €350 million to the Development Bank to enable it develop, administer and implement guarantee schemes to local commercial banks.

Professor Bonnici said the scheme was launched in April by the bank in conjunction with nine banks and since then more than 250 enterprises were enabled to stabilise their liquidity with over €200 million. He said that thus about €600 million remains available for commercial enterprises and then what happens after December has to be analysed according to the situation at the time although it is hoped the situation will improve and in fact currently matters seem to be returning to the normal cycle.

He said through the scheme nine commercial banks or financial intermediaries are enabled to provide loans to provide working capital to enterprises, request less guarantees and offer subsidised rates of interest as well as providing a moratorium on repayment of capital and interest rates.

Sectors considered under the scheme vary from hotels to restaurants to retail outlets but there are also other sectors such as telecommunications that have been affected by a drop in tourism and in a lesser manner construction entities, and varied sectors such as insurance. All these have suffered a drop in business and income and need this type of support.

Professor Bonnici explained that over and above the scheme, the Development Bank is making it easier for banks to provide loans because these are crucial to economic regeneration and help the growth of the economy in the coming months.