The Malta Business Bureau has commended the Maltese authorities for responding to the call of the European Council by making use of a joint SME Initiative.

The European Commission last week approved Malta’s EU Operational Programme for the SME Initiative for the period 2014-2020. The Maltese authorities have ringfenced €15 million of the 2014-2020 programming period funding which will benefit from an estimated leveraging effect of around four times.

Through this innovative financial instrument, local enterprise is ensured an initial estimated range of between €50-70 million worth of credit capital investment that will be dedicated specifically to support SME competitiveness.

The package will be funded through the European Regional Development Fund (ERDF) in the form of uncapped guarantees with the additional advantage of offering capital relief for financial intermediaries.

The SME Initiative, developed by the European Commission and the European Investment Bank was created with a view to helping Member States in supporting the EU’s SMEs on the back of the financial crisis.

In Malta’s case, it also builds upon the success of the Jeremie loan guarantee schemes, which were in place for the 2007-2013 programming period.

“We are pleased with this development as it shows the government’s commitment towards private enterprise. With the backdrop of a declining investment by the private sector in past years, particularly due to the uncertainty that surrounded and is still surrounding the eurozone and the European economy, the allocation of €15 million for the SME Initiative will encourage and incentivise SMEs to reverse this trend,” MBB president Mario Spiteri said.

“In a report we published last year on the allocation of EU Structural and Investment Funds in aid of private enterprise, the MBB noted how boosting private investment when the economy is in distress is likely to have a significant and permanent positive impact on the country’s potential growth.

“For this reason, we welcomed past initiatives such as Jeremie, and encouraged the government to invest in similar financial instruments, with the SME Initiative being a case in point,” Mr Spiteri said.

The MBB said it looked forward to a continued and sustained collaboration with the government to ensure that the EU funds are “allocated effectively and in the most efficient manner”.