Malta’s Small and Medium Sized Enterprises (SMEs) are doing much better than most of their EU counterparts in the current economic crisis, according to a new European Commission report published yesterday.
Placing the performance of Malta’s SME’s at par with those of Austria and Germany – the best EU performers – Brussels states that “forecasts until the end of 2012 see Malta’s SMEs continuing to weather the Eurozone crisis well.”
The report, issued at the beginning of an SME week organised across the bloc, analyses the latest data with regards to SMEs in various aspects including employment, access to finance, value added and environment.
Although the report complains, for the second year in a row, about the lack of data concerning Maltese SMEs – which form the backbone of the island’s economy – it states that from the available information they are doing well.
“Malta leads the EU average in terms of the value added created by SMEs in the service industries. So far Malta’s SME sector has been much less affected by the crisis engulfing the Eurozone,” the report states.
“Even the sharp and sudden downturn in employment and turnover immediately after the outbreak of the crisis in 2009 that occurred in most of the other EU member states is hardly visible in Malta’s SME statistics.”
According to the EU executive, the forecasts for the foreseeable future suggest a stabilisation at current levels of the three main indicators, namely the number of businesses, employment and value added.
The report shows that in 2011, Malta had almost 30,000 SMEs employing 88,423 or 76.3 per cent of all the gainfully occupied. The vast majority of, 95.1 per cent, are considered to be micro enterprises, employing fewer than 10 people.
On the policy front, the Commission mentions various positive developments in the past year including the creation of Business First, a one stop shop developed by Malta Enterprise, and various initiatives to facilitate access to credit, including schemes such as MicroCredit and MicroFinance.
Among the remaining challenges, the Commission mentions “reducing the disproportionately high administrative costs in place to access EU funding, and a more rapid transposition of certain fundamental EU legislation into national law – in particular the Late Payments Directive”.
Assessing the availability of finance to Maltese SME’s vis-a-vis the situation in the rest of the EU, the Commission states that Malta is doing better that the EU average this year.
“Far fewer loan applications have been rejected or made subject to unacceptable conditions and far fewer SMEs in Malta are reporting deterioration in access to public financial support or in the willingness to provide loans.”
With regard to the training of employees working in SMEs, the Commission recommends that more should be done in this area as Malta remains below average.
According to Brussels, while in the EU, 58 per cent of employees at micro enterprises are provided with training opportunities, the average in Malta falls to just 46 per cent.