Money cash euro

The Malta Development Bank has announced the extension of its COVID-19 Guarantee Scheme (CGS) until June 2022, in a move that will be welcomed by businesses that have yet to see a full return to normal operations, almost two years after the onset of the pandemic.

“In light of the observed economic recovery and unfolding COVID-19 developments,” the MDB said in a press statement, “in November 2021 the Commission adopted a limited prolongation of six months of the State Aid Temporary Framework, until 30th June 2022.”

This will allow Member States, where needed, to extend their support schemes and ensure that businesses still affected by the crisis will not be cut off from necessary support.

The MDB said it wrote to the Commission to extend its COVID-19 facilities in line with the amendments of the Temporary Framework.

In its decision of 12th January 2022, the European Commission approved the requested prolongation of the MDB’s existing COVID-19 schemes until 30th June 2022.

In its latest notification, the MDB also asked the European Commission to alter some of the terms of the CGS loans, both new and existing, to provide for more flexibility where needed.

The European Commission approved that, in exceptional cases and at the discretion of the commercial banks, the loan term can be extended from 72 months to a maximum of 96 months (inclusive of the moratorium period).

In the event of such an extension of the maturity, there will also be a change in the guarantee fees, which would be applicable retrospectively, and subject to other terms and conditions.

The objective of the MDB’s schemes is to preserve the continuity of economic activity during and after the COVID-19 outbreak, thus ensuring that undertakings impacted by the pandemic continue to have access to the necessary bank facilities to finance their working capital.

“As these facilities will now continue running until end June 2022, businesses requiring such financing are encouraged to approach one of the nine accredited commercial banks intermediating the schemes,” it said.

Moreover, the extension is also applicable to MDB’s COVID-19 Interest Rate Subsidy Scheme, whereby applicants can still benefit from a grant of up to 2.5 percentage points on the interest payable on the CGS loans for the first two years of the term.

MDB’s intervention through the CGS was crucial in ensuring that Maltese businesses survive the severe liquidity constraints they were facing due to restrictions brought forward by the pandemic spread.

Launched in April 2020, MDB’s CGS is leveraging on a Government guarantee of €350 million by mobilising commercial banks’ liquidity into the flow of credit to the real economy. Through the CGS, the MDB is providing a guarantee of 90 per cent on new working capital loans granted by commercial banks and this capital relief is enabling the creation of a portfolio of up to €777.8 million in new working capital loans to all businesses, regardless of size or sector.

Eligible working capital costs under the CGS include wages, rental costs and utility bills, among others.

Related

Malta ‘more attractive to property investors than to people looking to build a career’ – Marisa Xuereb

April 13, 2024
by Robert Fenech

Wages remain low in part because major policy change that made real estate the primary focus of investment, she said

WasteServ issues tender to turn shut Marsaskala waste treatment plant into park

April 12, 2024
by Fabrizio Tabone

WasteServ describes the park, which features an artificial lake, as a ‘green sanctuary’

Islands of fun! Entertainment contributes more to Maltese economy than to any other in Europe

April 12, 2024
by Robert Fenech

The sector also generates much higher value added than it does for any other EU country