During a Press Conference, Minister for Finance and Financial Services Prof. Edward Scicluna and Parliamentary Secretary for Financial Services and Digital Economy Clayton Bartolo announced more financial assistance to ease businesses’ liquidity constraints due to COVID-19 pandemic.
Following the launch of the Tax Deferral Scheme and the enforcement of a directive for Banks to provide moratoriums on bank loans and interest, Minister Scicluna announced that the Government will be subsidizing interest rates on the working capital loans for two years and up to a maximum 2.5%.
“This means that in addition to providing a €350 guarantee fund, through the Malta Development Bank (MDB), for commercial banks to offer up to €780 million in loans to businesses affected negatively by the pandemic, we are also paying a significant part of the interest rate on such working capital loans. Hence with this measure, the Government is enhancing access to bank financing for the working capital requirements of businesses in Malta facing a sudden acute liquidity shortage as a result of the COVID-19 outbreak,” Minister Scicluna stated.
Parliamentary Secretary for Financial Services & Digital Economy Clayton Bartolo explained that this scheme will be assisting businesses during these difficult times. “By this scheme, businesses shall be benefitting from a 2.5% subsidy on the interest rate on working capital loans obtained from local banks. This scheme will be injecting €40 million in the businesses’ pockets while assisting families to ease the financial burden. I would like to thank Bank of Valletta, HSBC, APS Bank, MeDirect, BNF, Lombard Bank, Izola Bank and FCM Bank for reaching this agreement with the Government to assist local businesses during extraordinary times,” concluded Parliamentary Secretary Bartolo.
These measures are expected to ease the negative impact of COVID-19 on businesses, the self-employed and families. Indeed, the IMF commended Malta’s financial packages while expecting the Maltese economy to record the least decline in GDP growth in 2020 amongst all the EU member states.