It is an undisputable fact that over the past four years the world has witnessed unprecedented economic turmoil. It is also undeniable that Malta has avoided the brunt of this economic crisis. Mainly, we believe that this was due to this government’s launching and implementing a myriad of schemes to help the small businesses and self-employed.
Indeed, over the past three to four years, different schemes have been targeted towards small businesses. These included the highly popular MicroInvest scheme, which supports the small business owner through a 40 per cent tax credit in the case of Malta and 60 per cent tax credit in the case of Gozo, on investment and recruitment, as well as the MicroCredit scheme, which provides access to subsidised loans.
In a couple of years, over 2,300 small business benefitted from one or more of these opportunities and these went on to invest more than €120 million in the process.
Over and above, during the past four years, through Malta Enterprise, we supported 570 entrepreneurs, through over €42 million in ERDF funds to help them further their innovation and competitiveness, to invest in e-businesses and in renewable energy sources, thus reducing their energy costs.
Small businesses have been the key sources of new employment that has ensured a significant recognition to Malta by the ILO, which recently remarked that only Malta and Germany managed to reduce unemployment to pre-crisis levels. No mean feat.
Last November, we decided to go one step further. We wanted to provide a further tonic to those, not necessarily in business, able to come up with innovative, interesting ideas for start-ups or expansions.
The reality is that the limited availability of funds many times prohibits small businesses from carrying out new investment projects and may consequently lead to the loss of business opportunities. Access to finance is the key to the growth of our businesses. These strive to cater for a clientele whose needs and tastes are constantly changing. Access to finance is one of the pillars of the Small Business Act for Europe and indeed we take pride in seeing Malta currently listed as best-practice by the European Commission.
This was the leitmotif behind last month’s launch of the MicroGuarantee Scheme, which has the objective to accelerate growth by facilitating access to debt finance for smaller business undertakings. These guarantees will be provided to businesses employing less than 20 employees to support funding required for the acquisition of tangible assets and working capital. Banks participating in the MicroGuarantee Scheme are providing loans at favourable conditions whereby the small business owner only needs to provide 10 per cent of the collateral required for an eligible loan.
No Maltese government has ever committed itself to provide loan guarantees reaching up to 90 per cent as we are doing now. This is our strategy: giving our people, our businesses, full trust and all the resources to grow and prosper.
With dismay we note that Labour’s business policies are anyone’s guess. They talk the talk, but do not walk the walk. In his reactions to the launch of the Microguarantee scheme last year, Labour leader Joseph Muscat had expressed serious doubts on the feasibility of such a scheme.
Once again, we have proved him wrong.
The scheme is now open for a wide array of businesses in Malta and Gozo. The business community can compare our success to come up with yet another concrete initiative to help our self-employed, with Labour’s failure to eke out even one.
As the Pre-Budget Document emphasises the need to generate economic growth and sustainable job opportunities by incentivising enterprise and small businesses to expand their operations, and to continue attracting foreign investment to Malta, we remain steadfast in our determination to provide unparalleled aid to our self employed.
We sincerely urge the self-employed and small business owners to contact Business First in Guardamangia to learn more about these opportunities and the other incentives that support their growth and success.
The introduction of the MicroGuarantee scheme is yet another proof that this government goes all out in favour for small businesses and the self-employed: we put our money where our mouth is.
Tonio Fenech is Finance Minister, Jason Azzopardi is Small Business Minister