New €86M EIF and Malta Initiative to Boost SME Competitiveness and Unlock €60M in Investments

New €86M EIF and Malta Initiative to Boost SME Competitiveness and Unlock €60M in Investments

(IN BRIEF) The European Investment Fund (EIF) and the Government of Malta have launched a new €86 million initiative to support small and medium-sized enterprises (SMEs) in Malta. The first phase involves a €30 million guarantee through Bank of Valletta, backed by contributions from Malta’s European Regional Development Fund (ERDF) and EIF. This will unlock €60 million in investments for more than 140 SMEs, offering improved loan terms such as lower interest rates and reduced collateral requirements. The initiative, part of the InvestEU program, aims to strengthen the competitiveness of Maltese SMEs, fostering innovation, growth, and job creation.

(PRESS RELEASE) LUXEMBOURG, 18-Oct-2024 — /EuropaWire/ — A new initiative aimed at strengthening small and medium-sized enterprises (SMEs) in Malta has been launched through a joint effort between the European Investment Fund (EIF) and the Maltese government. As part of the InvestEU Member State Compartment, this operation sets the stage for a broader financial push to help SMEs thrive in a competitive marketplace. The initial phase of this program includes €10.5 million from Malta’s European Regional Development Fund (ERDF) and €19.5 million from EIF’s own resources, combining for a €30 million guarantee. This will help unlock a total investment of €60 million through Bank of Valletta, which was selected to implement the financing.

More than 140 businesses in Malta are expected to benefit from this scheme, which offers favorable loan conditions such as lower interest rates, reduced collateral requirements, and smaller down payments. This boost comes as part of a broader €86 million initiative designed to elevate Malta’s SME sector, fostering long-term growth and competitiveness.

Speaking at the launch event, Permanent Secretary Jonathan Vassallo from the Office of the Prime Minister highlighted the significance of this partnership: “Under the InvestEU programme, we are unlocking €60 million in loans, ensuring Maltese SMEs have access to the financial tools they need to thrive. This partnership will continue to address critical financing challenges, giving businesses the resources necessary to innovate, expand, and contribute to the European economy.”

This partnership, officially announced by EIB Vice-President Kyriacos Kakouris and Bank of Valletta CEO Kenneth Farrugia, marks the first operation under this newly established facility. The effort aims to create a more resilient SME sector by providing more accessible and affordable financing, with the ultimate goal of driving economic growth and job creation.

Vice President Kakouris praised the program, stating: “Our collaboration with the Maltese government and Bank of Valletta shows how the EIB, through the EIF, can offer customized financial solutions that empower entrepreneurs and businesses to grow. This initiative will help ensure that SMEs continue to be the engine of innovation and competitiveness in Malta’s economy.”

Bank of Valletta CEO Kenneth Farrugia reiterated the bank’s commitment to supporting local businesses: “As Malta’s leading bank, we are proud to be part of this initiative that will provide critical support to local SMEs. With this new portfolio, we are reaffirming our dedication to helping Maltese businesses thrive and remain competitive on a global scale.”

This initiative is backed by a €16.55 million EU budgetary guarantee, funded by Malta’s ERDF and national resources, with the goal of fostering economic resilience and enhancing SME growth across the island. By offering innovative financial products through Bank of Valletta, the programme is set to unlock further opportunities for the local business community.

Background information

The European Investment Fund (EIF) is part of the EIB Group. It supports Europe’s small and medium-sized enterprises (SMEs) by improving their access to finance through a wide range of selected financial intermediaries. The EIF designs, promotes and implements equity and debt financing instruments targeting SMEs. In this role, EIF fosters EU objectives in support of entrepreneurship, growth, innovation, research and development, the green and digital transitions and employment. In 2023, the EIF mobilized over €134 billion for the European economy, enhancing competitiveness, supporting innovative entrepreneurs, promoting social impact, fostering sustainability, and advancing the green transition. Going forward, EIF aims to strengthen financing access for European entrepreneurs, focusing on key sectors to drive sovereignty, competitiveness, and a greener, more inclusive future.

About the InvestEU Member State Compartment

The InvestEU Member State Compartment enables the Member States to contribute part of their shared management funds, resources from the Recovery and Resilience Facility, and national resources to the InvestEU Fund by setting up a dedicated Member State Compartment. With this voluntary contribution, Member States can leverage on the InvestEU guarantee to support specific national priorities. Under the Member State Compartment, loans, guarantees or equity investments can be offered as a complement to other public and private investments.

The InvestEU Fund’s Malta Member State Compartment (Malta MS-C), backed by an overall contribution of €16.55 million from the Maltese government, is expected to leverage public resources, creating a total investment of up to €86 million to support Maltese enterprises, with up to €60 million to be generated by Bank of Valletta. The SME Competitiveness Guarantee product is designed to improve access to finance for Maltese businesses. This initiative, detailed in the Contribution Agreement between the European Union and Malta, signed in January 2023, aims to restore blocked lending channels. The product will be implemented through Uncapped Guarantees, forming the Malta MS-C Uncapped Portfolio and, overall, this initiative plays a key role in supporting Maltese SMEs by improving access to finance, contributing to economic recovery and growth.

Media Contacts:

EIF: Lorenzo Squintani | l.squintani@eib.org, tel.: +39 366 57 90 312

Website: www.eib.org/press — Press Office: +352 4379 21000 — press@eib.org

SOURCE: European Investment Fund