Prime Minister Joseph Muscat and Commonwealth Secretary General Kamalesh Sharma set the ball rolling for the creation of a trade financing facility for small states.

Mr Sharma said the target starting point is a capital of $20 million in pledges from all Commonwealth states. Malta, India, Mauritius and Sri Lanka have put up undisclosed amounts to finance the facility.

There will be lobbying over the coming days to increase pledges.

The facility would help small countries access trade finance.

The declaration of intent was signed this morning by foreign ministers.

Dr Muscat said Malta was one of the anchor countries to initiate the facility along with India, Sri Lanka and Mauritius.

He said states smaller than Malta faced problems to access finance in the global economy because they did not have critical mass.

Dr Muscat said he hoped other Commonwealth countries would contribute to the facility.

The facility would be used as a guarantee for up to 20 per cent of a trade deal, making it easier for banks to step in with finance.

This is distinct from the €100,000 Malta pledged yesterday for the creation of a Centre of Excellence for Small States.