Business chambers frustrated as micro-credit scheme delays persist

Business groups are dismayed there has been no confirmation from authorities on the promised September launch of the micro-credit scheme for Malta’s smallest businesses, the backbone of the commercial community.

The Malta Chamber of Commerce, Enterprise and Industry is “frustrated” by the delay, while the Malta Chamber of Small and Medium Enterprise – GRTU has branded it the ministry’s “biggest mess up”.

The Finance Ministry’s Parliamentary Secretariat for Small Business told The Times Business that the micro-credit scheme was “in its final stages of preparation”.

“The government is optimistic that the planned programme for the launch will be adhered to. More information will be given to the press in the coming weeks,” a spokesman for the Parliamentary Secretariat said.

Announced in Budget 2010, the micro-credit scheme, originally earmarked for an April launch, aims to set up a €10 million fund, financed by the European Union under the JEREMIE regional funding scheme. Micro and small businesses would be granted loans of up to €25,000 at advantageous interest rates.

In May, Parliamentary Secretary Jason Azzopardi told The Times Business the government and the Finance Ministry had done what was required of them and that the European Investment Bank was administering bureaucratic processes.

The Budget announcement had been welcomed by the Chamber which had advocated the scheme’s introduction as it would have enhanced small businesses’ access to finance opportunities to realise viable projects.

The Chamber had continued to press for the scheme’s urgent introduction since November.

“We have followed up regularly with Malta Enterprise on the status of the initiative,” Malta Chamber told The Times Business. “In the meantime, we have been informed that, being a European-funded initiative, the launch of the micro-credit scheme is awaiting the completion of the full process, through European institutions.

“The Malta Chamber is frustrated by this delay in the implementation (of the schemes) which is costly for eligible businesses. The authorities had given a launch date of September, however, at this stage, this date remains very doubtful. We augur the whole process will be cleared without further unnecessary delay for the benefit of future development of local business.”

GRTU director general Vince Farrugia was furious that no definite announcement has been made, saying his organisation had lobbied for the schemes for two years before they were included in the Budget last November.

“During the recession, micro and small businesses needed intervention immediately,” Mr Farrugia said. “We were originally told the schemes would be initiated last January, then February, then May, then September. This constant procrastination was one of the reasons I walked out of the Malta Council for Social and Economic Development. This is incompetence. The government is treating small businesses as if they are nothing.”

Mr Farrugia said all other European Union member states had granted state aid to small businesses which, on average, made up 10 per cent of commercial communities. In Malta, he pointed out, where small businesses made up 99.2 per cent of total enterprises, nothing was done for them when they needed help most.

“It was right to prioritise larger businesses in the first round of the recession,” Mr Farrugia stressed. “We can live with that. But this has now become a bureaucratic delay and there is no excuse for it. How can we start discussing Budget 2011 when the only promised measure to small businesses had not been implemented?”