Around €200 million in loans have been issued to businesses which faced financial trouble due to the coronavirus economic slowdown, the Malta Development Bank said on Saturday.  

The loans have been given to roughly 250 companies employing more than 15,000 workers in total and are part of a loan guarantee scheme launched early in April. 

Figures were valid as of the end of June. 

Loans are backed by the MDB, a government-owned institution set up to support public policy by financially backing projects aimed at stimulating economic growth.

The €200 million disbursed as loans are part of a €350 million basket made available by the government through the MDB guarantee scheme.

Through the scheme, the MDB covers 90 per cent of each working capital loan to businesses with cashflows damaged by the COVID-19 pandemic, allowing commercial banks to issue loans with reduced collateral requirements and other favourable conditions.

Businesses can use the loans to cover salaries, pay bills or rent or other such immediate costs.

Nine local commercial banks have been accredited to the scheme, which the government estimates has the potential to generate an overall loan portfolio of almost €789 million.

MDB chairman Josef Bonnici said that the bank’s schemes had multiple benefits.

“We have ensured that business owners are supported in their efforts to be resilient through these challenging times while most importantly safeguarding the jobs these companies support. At the same time, we are also making it easier for the banks to continue providing new loans which will be crucial in supporting the economy not only to survive but to regenerate itself and deliver growth in the months ahead,” he said.