Last Updated on Thursday, 29 April, 2021 at 9:23 am by Andre Camilleri
The Malta Development Bank (MDB) has transformed itself into a key channel for the delivery of economic and financial support measures against the challenges posed by the pandemic, while also delivering incentives intended to revitalise Malta’s economy during the prospective recovery phase.
In its Annual Report for 2020 tabled in Parliament today by the Minister for Finance and Employment Clyde Caruana, the MDB gave details of how hundreds of businesses employing tens of thousands of employees benefitted from the MDB’s support throughout the past year.
Despite originally being founded with the primary objective of addressing the funding gaps of SMEs and infrastructural projects, the Bank quickly responded to the needs of the economy to support companies of all sizes in all economic sectors and to provide a broader range of financing that fit the needs of businesses during such unprecedented circumstances.
The major support measure implemented throughout 2020 was the Covid-19 Guarantee Scheme, through which the MDB facilitated over €400 million in working capital loans through nine commercial banks, supporting more than 500 businesses, accounting for around 30,000 employees.
The Covid-19 Guarantee Scheme provides a guarantee of 90% on all eligible loans and also includes an interest rate subsidy. It has therefore significantly enhanced access to bank financing for working capital, reduced the cost of borrowing, making credit more affordable, and even eliminating the need for collateral for the smallest enterprises.
At the same time, the MDB has also continued to support investment to enable the country achieve a higher level of growth through increased value-added, while promoting social inclusion, a cleaner environment, provide more opportunities for students and improve the quality of life.
Two notable examples of such support measures are the SME Invest scheme, through which the MDB helped SMEs across a number of different economic sectors undertake new investment in 96 projects worth almost €30 million and the Further Studies Made Affordable scheme, which helped close to 200 students further their studies under very favourable conditions.
In parallel to this activity, the Bank continued strengthening its organisational setup, enhancing its technical capacity and knowledge while investing in its human resources to be able to take on more responsibilities in the near future including an important role in mobilising the InvestEU guarantees in Malta over the coming years.
On the publication of the report, MDB Chairman Prof Josef Bonnici expressed his confidence with regard to Malta’s economic recovery: “Malta’s business community has shown remarkable resilience in combatting the dire economic effects of the pandemic, and we can be proud of the role that the Bank has played. There is more to do, and we will definitely not rest on our laurels. We are now looking forward to ensuring that we can continue supporting the economy in a post-COVID-19 recovery period”.
MDB Chief Executive Officer Mr Rene Saliba added that the MDB is already at work to identify how it can deliver a better product to its beneficiaries which serves as strong and innovative stimulus in the upcoming recovery: “While we are very pleased with the results achieved so far, we are reviewing our initiatives, analysing market developments and originating new ideas. Our intention is to support, encourage and facilitate Malta’s rapid resurgence as a vibrant and fast-growing economy in the months ahead”.
The full Annual Report is available on the MDB Website.