Following the publication of a Green Paper on the long-term financing of the European economy, BUSINESSEUROPE organised a business seminar to discuss how to cope with factors of negative impact on banks’ ability to lend, and how to develop alternatives to traditional bank finance, in particular for SMEs.
MBB President George Vella was invited to participate in a Businesseurope workshop on access to finance, presenting the case of Malta, emanating from the findings of the recent MBB study entitled ‘Market Gaps in Access to Finance’. The report put forward recommendations that can be implemented locally, but which can also potentially be reproduced in other EU member states. Mr. Vella, who was accompanied by MBB CEO Joe Tanti, elaborated on the findings of the MBB report calling on the European Commission to structure new innovative financing products in conjunction with the European Investment Bank.
Mr. Vella made reference to the incoming EU programming period for the period 2014-2020, which should be characterized by greater focus on impact intensiveness of cohesion-funded projects with significant attention devoted to SME development and support throughout their lifecycle. In this regard, financial engineering instruments will become more important vehicles for the delivery of the EU cohesion policy which is also undergoing a transformation in being increasingly aligned as a practical support tool for enabling the attainment of the Europe2020 Strategy targets.
During the panel debate, speakers including high-profile representatives from the venture capital industry and the issuers business highlighted the need for EU policy makers to better attune themselves to the credit demand needs of enterprises as they outgrow the ability of their traditional banking partners to service their credit requirements. It is at this stage, that public listing of SMEs and mid-caps and the facilitation of corporate bond markets and securitization become a critical aspect for underpinning a sustainable growth-oriented business development model at both enterprise and sector-level.
On a separate occasion, the MBB was invited by another Brussels based pan-European organisation, Eurochambres, to present the findings emanating from the ‘Market Gaps in Access to Finance Report’ to its Finance Committee, in a workshop dealing with alternative financing. MBB’s Permanent Delegate Omar Cutajar and Executive Daniel Debono showcased the realities of the Maltese credit market, which is predominantly characterized by traditional bank lending and overdraft facilities. They reiterated with European Commission officials from DG Enterprise and Industry, the successful implementation of the loan-guarantee JEREMIE scheme; and the expectation to see more innovative financial engineering instruments introduced in Malta to benefit different SMEs operating in different sectors and at different stages of their development lifecycle.
The MBB’s approach to disseminate its recommendations emanating from this study in Brussels, follow on a number of local initiatives, whereby among others the report was presented to Government and to the MCESD. The ‘Market Gaps in Access to Finance’ study was followed by another MBB detailed report that was published in July 2013, entitled ‘The Allocation of EU Funds in Aid of Private Enterprise: 2014-2020’. Both reports can be downloaded from www.mbb.org.mt