On 24 June, the Malta Development Bank signed a €45m global loan agreement with the KfW Group. MDB will use the funds to promote SME finance in Malta with special emphasis on SME investments. SMEs in Malta will benefit from the favourable financing conditions offered by KfW and MDB.
This facility aims to address the market gap in access to finance for SMEs. MDB will mobilise the funding by direct loan agreements with SMEs in conjunction with domestic banks that will be participating in a new scheme that the MDB plans to launch soon, comprising co-financing and a partial guarantee.
This loan agreement will contribute to deepen and extend the existing business relationship between KfW and MDB which started during the bank's incorporation process.
The global loan with KfW is MDB's first funding transaction. KfW was set up in 1948 by the German government and is one of the world's leading promotional banks with assets of almost €500bn.
Dr Ingrid Hengster, member of KfW's Executive Board says: "Malta's economy has grown dynamically clearly above EU average growth rates in the past few years, not least due to the important role of the country's small and medium-sized companies. Their share in Malta's business economy value added is about 80%, thus much higher than in most of the other EU countries. I'm delighted to deepen the partnership between KfW and MDB with this global loan and I'm confident that it will contribute to strengthen both the country's prospering economy and the German-Maltese business relationships."
Prof. Josef Bonnici, chairman of MDB noted that: "SMEs are one of the top priorities of the MDB as they ensure growth, innovation, jobs and the long-term competitiveness of the Maltese economy. This global loan will enable MDB to fulfil its mandate by providing the necessary support to SMEs in Malta to overcome the persistent difficulties in financing new investment. We are convinced that this bilateral operation provides an excellent basis for further collaboration between KfW and MDB in the future."