850 enterprises to benefit over next 5 years through SME initiative

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850 enterprises to benefit over next 5 years through SME initiativeThe Deputy Prime Minister, Mr Louis Grech together with Parliamentary Secretary, Dr Ian Borg launched the SME Initiative. Mr Grech told those present that, “through the leveraged effect of this initiative Malta will be making available some €60 million of new money which will benefit around 850 enterprises over the next 5 years.”

The Initiative was presented to the major financial institutions in Malta and to other stakeholders, including the Chamber of Commerce and Enterprise, the Gozo Business Chamber, and the Malta Business Bureau.

Members from various European Institutions were present, including Ms Charlina Vitcheva (DG Regional and Urban Policy), Mr Pier Luigi Gilibert (European Investment Fund) and Romualdo Massa Bernucci (Deputy General European Investment Bank).

This initiative will combine the different resources of the European Structural and Investment Fund, the EU Horizon 2020 programme, and the lending capacity of the European Investment Bank. The Government of Malta sees this as an important step in its push to make innovative financing tools available to the country’s small and medium enterprises.

The Deputy Prime Minister said that Malta is the second Member State, after Spain, to launch this initiative. “This underlines our commitment to make local industry and business more competitive on the international, global market”. This is an initiative that complements existing facilities in Malta.

The previous Jeremie scheme confirmed that when SMEs are offered suitable financing instruments, they will react positively. The tool selected for the Initiative is that of an uncapped portfolio guarantee, under which the selected financial intermediaries will benefit from a 75% risk cover on each eligible SME loan.

These schemes, the Deputy Prime Minster continued “are initiatives that provide a unique opportunity for European citizens to relate to the Union and are a visible demonstration of the benefits of EU membership,”

“Furthermore, these funds, together with the single market, are a catalyst for economic growth in the EU. The revival of the European economy, under the leadership of the Commission, should focus on priorities of which Member States will truly take ownership.”

During the press conference, Jyrki Katainen the Vice President of the European Commission responsible for jobs, growth and competitiveness and Commissioner Carlos Moedas responsible for research, science and innovation gave their comments on this initiative via a video message. Both of them congratulated Malta on being the second Member State to launch this Initiative.

Vice President Katainen said that, “the SME initiative comes on top of other EU and national financing to SMEs, in the form of grants or financial instruments, including through ESI Fund Resources.”

He continued by saying that, “it will provide a significant impetus to enhancing the financing of the real economy and supporting the recovery from the crisis.”

Commissioner Moedas said that, “with today’s agreement, Malta is leading by example. The Maltese economy will benefit from even more innovative financing for its SMEs.”

The Vice President concluded that he plans to visit Malta in September to present in more detail the Investment Plan for Europe.

Parliamentary Secretary for EU Presidency 2017 and EU Funds Dr Ian Borg said that Financial Instruments provide a good framework for helping SMEs.

“The SME Initiative is not the only one the Government is planning to undertake. Similar initiatives – to the tune of €22m – are in fact also planned under the main programme, including instruments specific to the energy sector. Such instruments, along with a mix of grants and other schemes, will provide the necessary assistance to SMEs.”

Photograph_ DOI/Pierre Sammut

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