Fabian Demicoli

Access to Finance for SMEs – BOV JEREMIE Scheme


This week GRTU's EU Desk and Europe
Direct Valletta held an information session on Access to Finance with special
focus of the BOV JEREMIE Scheme with the full collaboration of Bank of Valletta
and the European Commission representation in Malta.

Access to Finance is very
important for enterprises especially SMEs that tend to be more limited on cash
flow. GRTU was very pleased to see the JEREMIE scheme that had been very
successful in the past years and has helped around 540 enterprises invest in
their business extended.

The JEREMIE scheme supports
SMEs including micro enterprises and start-ups, though a financial facility
that is easily accessible and the provision of credit risk protection. The
scheme is in the form of a loan offered at advantageous interest rates and
collateral requirements.

What are the parameters of the
JEREMIE Scheme?

–    Eligible SMEs: Micro, Small or Medium sized as per EU definition

–    Excluded Industries: Industries related to Fishing, Agriculture,
Construction, Real Estate, Transport

–    Availability period: 36 months

–    Type of facility: New Loans (overdrafts are not eligible)

–    Purpose of Loan: Capital Expenditure (Investments which enhance
the company's value)

–    Repayment structure: Amortising or Bullet Type

–    Maturity period: Minimum 1 year/ Maximum 10 years

–    Default definition: In line with Basel II – 90 days in arrears
means default

–    Minimum loan amount is of €5K

The loan may be utilized for
various purposes amongst which:

–    Setting up of Business Premises including new catering establishments/
offices/ retail outlets

–    Purchase of tangible assets like machinery, computer hardware and
other equipment

–    Investment in Health Equipment

–    Purchase of transport (passenger) vehicles

–     Purchase of energy efficient equipment

–     Purchase of intangible assets like' acquisition of pharmacy
licence' which is capitalized in SME's Balance Sheet

Under JEREMIE start-ups are
defined as those SMEs which have carried out their main business for a maximum
period of 24 months.

6PM gave a presentation on
their experience with JEREMIE. The CEO explained how they had developed a new
innovative online product called Quick and the JEREMIE funds were utilized to
engage developers that would execute the tailor made demands of clients through
the tools offered by Quick. 6PM's Quick tools are developed to help clients
achieve more with less. Built on applied ‘Common Sense' principles that form
the foundation of the 6PM Agile Delivery Framework, these products are designed
to provide clients with easy to use tools that will help them save both time
and money.

As of 2014 other very
interesting schemes and funds will be made available under the umbrella of
Access to Finance, these include COSME and Horizon 2020, which we will hear
more about as the new year approaches.

The meeting was opened by Mr
Martin Bugelli, Head of the European Commission Representation Office in Malta
and Mr Paul Abela President of the GRTU. Dr Joanna Drake, Director, Promotion
of SMEs competitiveness at the DG Enterprise and Industry of the European
Commission, who delivered a speech on what to expect next from the EU in
relation to facilitating access to finance for SMEs. The JEREMIE Scheme
presentation was delivered by Mr Peter Sant, Head, research and EU Affairs,
Business generation and EU Affairs Department at BOV. Closing remarks were
delivered by Mr Noel Scerri, Executive Head, Business generation and EU
Affairs, BOV.

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