The EU approves €80 million Maltese scheme to support SMEs
Financial assistance to SMEs looking to invest and diversify their business following the coronavirus outbreak
The European Commission has approved, under EU State aid rules, a €80 million Guaranteed Co-Lending Scheme (GCLS) for small and medium-sized enterprises (SMEs) in the context of the coronavirus pandemic.
The scheme is aimed at providing financial assistance to SMEs that are looking to invest and diversify their business following the coronavirus outbreak and its impact on the wider economy.
The GCLS is a risk-sharing facility involving co-lending by the Malta Development Bank (MDB) for half of the total loan amount and by other accredited commercial banks for the other half. In addition, MDB will provide a guarantee up to a maximum of 60% of the loan amount lent by the commercial banks.
Therefore, the GCLS consists of two different measures:
- aid in the form of loans directly granted by MDB; and
- aid in the form of guarantees granted by MDB to the commercial banks on the part of the loan lent by them.
The Commission assessed the measure under EU State aid rules, and found that the Maltese scheme is necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a Member State, in line with the State aid Temporary Framework.
This measure will be in place until June 30, 2022.