Mr Vassallo was speaking at a seminar organised by the Malta Institute of Management entitled The Instruments to Finance Business Growth.

Lack of access to financing, he said, is viewed as one of the most significant barriers to start-up growth of small businesses, adding that the local scenario seems to be characterised by lack of access rather than lack of availability.

He added that the perception of traditional lenders on the matter did not help, saying that they viewed loans to SMEs as less profitable than those made to larger firms. This view is mostly due to the higher transaction costs carried by small loans as well as the perception that they incur a higher failure rate.

He explained that access to finance was one of the main themes of the European Charter for Small Enterprise. Reiterating the government’s commitment towards this principle, he recalled the secretariat’s work plan for 2003-2004 called Towards the implementation of an Entrepreneurial Policy where you, the individual in business are a priority, which contained more than 50 initiatives aimed to help SMEs.

On fiscal matters, Mr Vassallo said that the government had started a process of simplification that, it is hoped, would yield a better synergy between the government and the private sector.

He also anticipated that there were schemes in the pipeline. These were aimed at offering financial incentives to employers, particularly by way of training.