More than 700 firms in Malta and Gozo have secured over €600 million in guarantees and loans backed by the Malta Development Bank, since this was set up, it notes in its annual report for 2021.
The MDB commenced operations in December 2017.
The figure, the report, tabled in Parliament on Tuesday, noted, represented almost 14% of all outstanding business loans in Malta.
The bank explained that as the pandemic continued to restrict economic activity and liquidity in 2021, it extended its COVID-19 related schemes ensuring firms continued to have access to bank credit to finance their working capital needs.
The COVID-19 guarantee scheme (CGS) remained the bank’s most impactful, with more than 600 firms employing around 40,000 persons benefitting. It provided a lifeline to businesses requiring finance to cover working capital costs such as wages, rental costs, and utility bills. In parallel, the MDB also operated an interest rate subsidy scheme, which provided grants on interest payable on CGS loans.
The bank’s core programmes also continued to deliver significant contributions. The SME invest remained MDB’s main guarantee scheme for new investments by small businesses. And as at end of 2021 the allocated portfolio of €50 million has been almost entirely absorbed.
The further studies made affordable scheme, through which the bank continued to support the upskilling of Malta’s youths and strengthen the country’s human capital, was also highly successful and had its budget topped up for the year in review. Earlier this year, a new scheme, the FSMA+ was launched, also through EU funding, making available another €15 million in soft loans for students.
The bank also continued to support infrastructure projects, whose borrowing requirement tended to exceed the amount that any single commercial bank is willing to accommodate.
MDB chairman Josef Bonnici explained that as the economic situation evolved in the past months, the bank adjusted its strategy to reflect the changing needs of the economy and the business community and had now set the wheels in motion to develop programmes that reflect the evolving circumstances of the post-pandemic scenario.
The bank, he said, was keeping an eye on the unfolding situation in Ukraine and its effects on the Maltese economy and is actively considering the introduction of a number of measures to support strategic sectors in securing the supply of key commodities and facilitate the flow of liquidity to local businesses.