The European Commission has approved the Malta government COVID-19 interest rate subsidy scheme for businesses

The scheme will be funded by the government and managed by the Malta Development Bank (MDB).

It is open to all businesses established and operating in Malta.

The commission said the scheme met all the conditions of the Temporary Framework established by the EU.  It was considered "necessary, appropriate and proportionate" to remedy a serious disturbance in the economy of a member state.

Finance Minister Edward Scicluna welcomed the commission's approval, saying it it is expected to ease companies’ negative cashflow impact and meet their new working capital requirements due to the effects of COVID-19, at the least cost possible.     

The government has allocated €40 million to pay up to 2.5 per cent interest due on the working capital loans covered under the scheme, for the first two years. In certain cases, businesses will only be paying an annual 0.1% interest rate on the loan advanced for the first two years of the loan term.

Loans will be available from the credit institutions accredited by the MDB, and will cover new working capital loans.