InvestEU: The Government of Malta and the EIF join forces to boost SMEs competitiveness with over €15 million

In a collaborative effort between the European Investment Fund (EIF) and Malta's Ministry of European Funds and Lands, small and medium-sized businesses (SMEs) in Malta are set to receive substantial support totalling €16.55 million through the 'Malta Member State Compartment', which is the successor to the successful 'SME Initiative Programme.' This initiative falls under the umbrella of InvestEU, the European Commission's programme designed to attract investments of at least €372 billion to address European Union policy priorities by 2027.

The primary objective of this EIF-backed InvestEU mandate is to establish an 'SME Competitiveness guarantee instrument.' This new instrument is intended to replace the previously successful SME Initiative Programme, which, with an initial contribution of €29 million, facilitated the creation of a portfolio worth approximately €120 million, supporting over 1,000 SMEs in Malta. The 'Malta Member State Compartment' begins with an initial budget of €16.55 million, comprising €9.48 million from the European Regional Development Fund (ERDF) and €7.07 million from national resources through JEREMIE reflows, which is part of Malta's Multiannual Financial Framework (MFF) allocation. This funding will be directed towards building a loan portfolio amounting to €60 million through the SME Competitiveness Guarantee Instrument.

The EIF's investment through InvestEU is expected to have a significant impact on Maltese SMEs by enhancing their access to financing and improving financing conditions. This could lead to lower interest rates and reduced collateral requirements, making it easier for SMEs to obtain the necessary funding for growth and innovation.

This proposed mandate represents an expansion of the InvestEU programme, streamlining the implementation model for third-pillar debt mandates. By leveraging the expertise and resources of the EIF, this partnership aims to unlock the full potential of Maltese SMEs, fostering innovation and job creation in the region.

Silvio Schembri, Minister for the Economy, EU Funds and Lands, said: “The instrument will give SMEs more access to finance, addressing the issue of limited access to finance by SMEs. This initiative also makes it more attractive to lending institutions like banks as it shares the risk burden due to the fact that the instrument covers a portion of the amount lent to SMEs, whereby banks can offer more competitive interest rates and longer-term repayments. In other words, it helps address the financing gap that many SMEs face so that SMEs can stay ahead of the game and invest in innovation to meet today’s ever increasing technological advancements, boosting economic growth in the process, said Minister Schembri.

Marjut Falkstedt, EIF CEO, commented on this development, stating, "Malta has been a pioneer in utilizing EIF financial instruments since 2007, and this strategic partnership between EIF and the Republic of Malta marks a pivotal moment in our ongoing support for the country's SMEs. The positive outcomes achieved through the SME Initiative program have exceeded our initial expectations. As we move forward, we are committed to continuing our support for Maltese SMEs to promote sustainable and inclusive growth in the country.

Background information

The European Investment Fund (EIF) is part of the EIB Group. It supports Europe's small and medium-sized enterprises (SMEs) by improving their access to finance through a wide range of selected financial intermediaries. The EIF designs, promotes and implements equity and debt financing instruments targeting SMEs. In this role, EIF fosters EU objectives in support of entrepreneurship, growth, innovation, research and development, the green and digital transitions and employment. In 2022, the EIF provided over €9 billion to finance small businesses and green projects, aiming to unlock around €97 billion in investment to promote climate neutrality, the digital transition of European industries and the competitiveness of EU entrepreneurs. Against the backdrop of challenging economic prospects for 2023, the EIF intends to make progress with the InvestEU programme, REPowerEU and other initiatives, such as the European Tech Champions Initiative.

The InvestEU programme provides the European Union with crucial long-term funding by leveraging substantial private and public funds in support of a sustainable recovery. It also helps mobilise private investments for the European Union’s policy priorities, such as the European Green Deal and the digital transition. The InvestEU programme brings together under one roof the multitude of EU financial instruments currently available to support investment in the European Union, making funding for investment projects in Europe simpler, more efficient and more flexible. The programme consists of three components: the InvestEU Fund, the InvestEU Advisory Hub and the InvestEU Portal. The InvestEU Fund is implemented through financial partners that will invest in projects using the EU budget guarantee of €26.2 billion. The entire budget guarantee will back the investment projects of the implementing partners, increase their risk-bearing capacity and thus mobilise at least €372 billion in additional investment.

Press contacts

EIF: Lorenzo Squintani | l.squintani@eib.org, tel.: +39 366 57 90 312
Website: www.eib.org/press — Press Office: +352 4379 21000 — press@eib.org 

European Commission: Flora MATTHAES
Tel.: +32 229 83951
Email: flora.matthaes@ec.europa.eu