Last month, Minister Fenech and myself launched another outstanding government scheme, the Micro Guarantee. Applications for the scheme, which is intended to assist small enterprises to invest in their business, thus creating more job opportunities will be received till 1st December 2013. The satisfaction derived from launching such a scheme is the fact that the government is introducing yet another innovative initiative, which shows that we really have the small business at heart and that this government cares about those segments of the economy that have the potential for development and generate jobs.
Enterprises employing up to 20 people that include start-ups and self-employed can benefit from the Micro Guarantee scheme. In actual fact, the guarantee is aimed at these enterprises as to help them secure a loan from the participating commercial banks. To date, Banif Bank, Bank of Valletta, HSBC and Lombard Bank have confirmed their participation and other banks may still join.
The Micro Guarantee scheme is being administered by Malta Enterprise and is aimed at facilitating access to loans of up to €100,000 for eligible enterprises. Enterprises will be able to utilise these funds to finance projects leading to business growth and development. Malta Enterprise will give a Letter of Intent to the successful applicants and this can then be presented to any of the participating banks. Once the bank agrees to issue the loan, it will then inform Malta Enterprise that the project was deemed commercially feasible and that a loan in favour of the beneficiary enterprise will be issued.
Eligible costs for the guarantee may include the acquiring of useful goods like machinery, functional equipment and other tangible assets like fixtures and fittings. The funds can also be directed towards financing the refurbishment and restoration of commercial properties, towards investments that lead to business growth or to the development of a new market. The acquisition of immovable property linked to a business development project; as well as working capital linked to such investments can also be considered in the application for the guarantee. The plus of the Micro Guarantee, for those benefiting from the scheme, is that one will be able to obtain loans at favourable conditions and will be required to provide only 10 per cent of the value of an eligible loan as security. The guarantee can only be used to support a new loan and may not be used to support overdrafts or other revolving credit facilities.
This is another significant and important move by the present government to assist small enterprises to develop and expand their business. The Micro Guarantee scheme thus complements the Micro Credit and the Micro Invest Schemes and is a significant addition to the number of initiatives designed by the government to assist small businesses. These initiatives demonstrate the determination and commitment this government has to address those areas of the economy that can develop and thus stimulate economic growth. To date, no less than 2,800 businesses have benefited from more that €160 million in aid granted under the MicroInvest and MicroCredit schemes as well as European funds. This is indeed evidence that only the PN provides the safest environment for the business and enterprise environment and that the PN actually works!
Dr Azzopardi is Minister for Fair Competition, Small Businesses and Consumers