Author: SME Chamber

THE MDB COVID-19 GUARANTEE SCHEME: AN EX-POST ASSESSMENT

The Malta Development Bank presented the results of a research related to the MDB Covid-19 guarantee scheme to the Malta Chamber of SMEs executive council.

The COVID-19 outbreak, and the ensuing period of heightened uncertainty and economic volatility, precipitated a sudden and acute liquidity shortage for businesses in Malta. The MDB’s swift response through the COVID-19 Guarantee Scheme (CGS) provided guarantees to commercial banks to help businesses in Malta access bank financing for working capital requirements. The CGS was approved by the European Commission in April 2020 under the State aid Temporary Framework to support the economy, as part of the wider package of the Government of Malta’s COVID-19 Response Support Programme. A Guarantee Fund of €350 million was allocated by Government for the purpose of guaranteeing loans by commercial banks. The CGS addressed working capital needs for hundreds of businesses and was rolled out in record time by the MDB. The CGS peaked at more than half a billion euro in sanctioned working capital loans and remains MDB’s largest scheme to date. By the end of the inclusion period in June 2022, slightly more than two years from the launch of the CGS, the total amount of working capital loans sanctioned by the nine partnering commercial banks that were accredited to roll-out the CGS stood at €482.6 million, supporting close to 600 CGS facilities to more than 500 businesses.

The supported businesses collectively employ around 40,000 persons and range from hotels to large retail outlets, but also to smaller firms from all economic sectors. The assessment presented in this study is based on field research in the form of a survey conducted amongst a sample of beneficiaries of the CGS, as well as an economic impact measure based on the Gross Value Added data of all businesses benefitting from the scheme. This assessment aims to identify lessons learned, providing valuable insights to enhance future decision-making by pinpointing areas for improvement in both scheme design and implementation. By conducting ex-post analyses, the MDB ensures accountability, transparency, and evidencebased decision-making, fostering a culture of continuous learning and optimisation of its initiatives.

The assessment shows that the MDB scheme supported €1.7 billion in GVA equivalent terms. When taken as a share of total 2019 GVA, this €1.7 billion translates to around 13.0% of Malta’s 2019 GVA. From a sectoral point of view, the level of GVA supported for “Wholesale and retail trade, transport, accommodation and food service activities” by the CGS at 2019 levels was €849.6 million, or 34.3% of nominal sectoral GVA in Malta at 2019 levels. M

The impact of MDB’s countercyclical role cannot be assessed in isolation, but as part of broader government economic regeneration measures targeted towards local businesses, which amongst others included wage supplements and subsidies on utility bills and fuels. Nevertheless, economic literature suggests that working capital problems may severely affect the supply side of the economy. In this regard, the MDB’s working capital scheme during the Pandemic has been of critical importance to ensure that operating liquidity is constantly available to firms, which in turn is crucial for the efficient operation of businesses.

Mr. Andrew Aquilina has been appointed Chief Operations Officer (COO) of the Malta Chamber of SMEs.

Having joined in 2017, he initially focused on EU affairs before becoming Head of Policy. As COO, he will oversee daily operations while reporting to the Executive Council.

Mr. Aquilina is committed to continue working diligently for SME members, representing them in various forums, and contributing to the Chamber’s ongoing success.

Malta Chamber of SMEs salutes the cherished memory of Charles Busuttil who served as GRTU President for between 1998-1999 and 2001-2004.

A year ago, during the 75th Anniversary, the SME Chamber invited Mr Busuttil for this special occasion and H.E President Emeritus George Vella presented him a  commemorative gift on behalf the organization for his sterling work during his tenure.

The Malta Chamber of SMEs’ President, Council and staff send their condolences to his family during this difficult time.

The Malta Chamber of SMEs welcomes the news that the European Investment Bank (EIB) will be opening an office in Malta to support projects and further enhance access to funding.

The SME Chamber also welcomes comments made by EIB President Nadia Calviño to local media, emphasising that the aim of this office is to boost local businesses.

As a representative of the backbone of Malta’s economy, the SME Chamber looks forward to collaborating with EIB officials to strengthen support for businesses.

The Chamber is optimistic that the opening of the new EIB office in Malta will further increase funding opportunities for businesses and continue the excellent work already being carried out, particularly by the Malta Development Bank.

Visit www.blackfridaymalta.eu for the latest Black Friday offers in Malta.

The Malta Chamber of SMEs has launched its Black Friday campaign for this year, once again showcasing exclusive offers through the dedicated website www.blackfridaymalta.eu. This platform not only promotes businesses’ Black Friday deals but also provides customers with an easy and efficient tool to explore a variety of discounts.

Customers who register on the website will have the chance to win vouchers, with daily draws taking place until Friday. The campaign was unveiled during a press conference led by the Malta Chamber of SMEs Senior Officer, Mr. Marcel Mizzi, and Head of Communications, Mr. Fabian Demicoli.

Mr. Mizzi highlighted that Black Friday has become a pivotal time for businesses, urging more enterprises to feature their deals on the platform.

Mr. Demicoli emphasized the significance of Black Friday as the peak shopping period, ensuring that both businesses and consumers can maximize its benefits. He noted that shopping in Malta is increasingly competitive, offering convenience and peace of mind.

More than 100 businesses from over 15 sectors are participating in this initiative, with discounts reaching up to 70%, including free services. Customers can search for offers by category, sector, or discount percentage. Businesses interested in joining can easily create an account on www.blackfridaymalta.eu.

Hiring EU nationals in Malta is hassle-free for short-term employment (under 3 months) as no work permit is required—simply register their employment with Jobsplus. This streamlined process facilitates quicker onboarding and flexibility for employers.

For comprehensive support in navigating Employment Law, join the Malta Chamber of SMEs. Members gain access to free legal advice and support, empowering businesses to make informed decisions and ensure compliance with regulations.

This campaign is backed by the Norway Grant 2014-2021 through the Social Dialogue and Decent Work Programme, promoting fair and progressive employment practices in Malta. By joining the SME Chamber, businesses contribute to a stronger, more inclusive workforce environment. Stay ahead of legal developments and optimize your hiring strategies—become a member of the SME Chamber today.

The Malta Chamber of SMEs earlier today published the results of the SME Barometer (Q3 2024) Survey conducted amongst a total of 432 businesses (50.5% – Micro, 31%- Small, 16% – Medium and 2.5% – Large).

When asked what the topmost important issues are concerning their businesses, respondents stated that the most pressing issues are: Employee Shortage (43%), Unfair Competition (22%) and Traffic Congestion (18%).

The primary contributors to business concerns when it comes to national issues, respondents mentioned lack of good governance (41%) and Overpopulation (39%), which for the first time has featured as the second most important issue. Inflation continued to take a downward trend when compared to the previous quarter.

SME Chamber President Mr. Paul Abela said that ‘The businesses believe that unfair competition is impacting their business and this having a direct impact on their growth as a business coupled with a number of operational issues including the lack of staff’……Overpopulation is also having a direct impact on the countries’ overall infrastructure and support services’. This was evident also in other data, traffic congestion featuring as a key issue hindering the day to day operation.

The data shows that overall businesses’ sentiment continued to shift with 57% expressing uncertainty on whether it is a good time to invest in the next 12 months. 30% stated that the next twelve months is not a good time to invest, and 13% stated that it is a good time to invest.

Misco Director Mr. Lawrence Zammit noted that as highlighted employee shortage remains a topmost concern as a result of the current economic model. At the same time overpopulation was also regarded as an issue the government must tackle. In this regard, the government needs to incentivise further the digitalisation and automation processes of businesses in order to ensure that we can do more with less.

The SME Barometer survey is a collaborative effort between the SME Chamber and MISCO.

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