Bank of Valletta has built a reputation for being the local bank close to the business community, striving not only to meet its customers’ expectations, but as much as possible to anticipate them. Flexibility underpinned by responsible and cautious banking characterises the way Bank of Valletta interfaces with its customer base.
This is also true in the manner in which the bank continuously invests in technological innovation to bring a broader spectrum of financial services closer to the customer to ensure a 24/7 service.
The SME sector is widely recognised as the backbone of a nation’s economy, both in relation to GDP growth and job creation. Yet SME access to finance has always been a challenging factor to policymakers across the world, knowing very well that lack of funding to SMEs restricts economic growth.
This challenge has been exacerbated in recent years with SMEs being typically the collateral damage arising from the onslaught of the financial crises as many banks sought to deleverage and strengthen their capital base.
One can positively note that Malta was one of the few exceptions given the robustness of the local banks which kept on lending to the business community in the normal manner. Nevertheless one cannot deny that SMEs are challenging by their very nature given their inherent characteristics including the tendency to be undercapitalised, succession issues, weak governance and financial management structures.
Nonetheless, Bank of Valletta is firm in its commitment to support SMEs, and over the past years it has intensified its efforts to explore and tap opportunities available to reach out to SMEs while managing the inherent risks to protect customers’ deposits. Over the last five years, Bank of Valletta has established a niche specialisation in the tapping into EU financing opportunities and risk sharing mechanisms to improve the access to finance for SMEs.
The Bank of Valletta Jeremie Financing programme is a fine example of the bank’s extended reach to SMEs within an EU risk-sharing mechanism that was launched by the European Commission (Directorate General Region Policy) and the European Investment Bank. Through this programme, Bank of Valletta injected €62m in new loans assisting more than 650 SMEs in their financial requirements and resulting in investment in the economy of just over €100m.
Early this year, the bank also launched the BOV Start Plus programme, the first competitiveness and innovation framework programme guarantee through an agreement reached between the European Investment Fund and Bank of Valletta. This programme is specifically aimed to facilitate financing for micro-enterprises and start-ups. Generally defined as entrepreneurs or organisations employing less than 10 people, this sector represents 94 per cent of the businesses in Malta. The BOV Start Plus Package finances up to €25,000 of the initial working capital and capital investment of start-ups that can be paid over a five-year period.
This programme has only recently been complemented by the BOV 4 SME Financing product, which provides financing to SMEs at the very advantageous rate of four per cent for the first four years, followed by a competitive interest rate for the remaining period, up to a maximum of 10 years. Such incentive has been possible following Bank of Valletta’s success in tapping funding from the European Central Bank’s Targeted Longer-Term Refinancing Operations.
Bank of Valletta is confident that these financing options will enable it to provide the best financing solutions to this economic segment and added value proposition.
For more information about the BOV Start Plus Programme or the BOV 4 SME Financing Product, visit any of Bank of Valletta’s branches, contact the Bank of Valletta EU Business Development Department at eubiz@bov.com or visit www.bov.com.
Bank of Valletta p.l.c. is a credit institution authorised by the Malta Financial Services Authority.