The Malta Independent 29 February 2024, Thursday
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Business associations welcome government’s interest rate subsidy

Thursday, 16 April 2020, 18:08 Last update: about 5 years ago

The Malta Chamber of Commerce welcomed the Government subsidy up to 2.5% of interest, on business loans related to the COVID-19 predicament, announced today.

"This measure, together with other measures announced previously such as the Government guaranteed loans and moratoria on loan repayments, many of which were proposed by the Malta Chamber, is appreciated as a step in the right direction and further support to businesses at this time of unprecedented challenges."

"Since businesses will still be expected to make good for a minimum of 0.1%, based on the discretion of the banks, the Malta Chamber calls on the latter to exercise maximum flexibility with businesses who are experiencing great credit-related hardships as in many cases, their revenue streams are drying out fast if not already."

The Malta Chamber said that it is available to provide assistance and facilitation between its members and the banking sector to iron out any issues that may arise.

"The Malta  of Commerce shall continue to monitor the situation closely, as it remains in direct contact with its members - Malta's foremost economic players - in order to provide Government with objective, researched and tangible recommendations and opinions, that will also drive a realistic and resilient exit strategy out of the current during and after the COVID19 pandemic."

Gozo associations

The Gozo Business Chamber, and the Gozo Tourism Association also welcomed the announcement by the government.

They noted with satisfaction the changes made to the COVID-19 Guarantee Scheme On Saturday 4 April 2020.

A statement read that the Gozo Business Chamber and the Gozo Tourism Association (GTA) had highlighted in a joint press release that the COVID-19 Guarantee Scheme (CGS) launched by the Malta Development Bank was not enough to inject the required liquidity that businesses needed in order to survive. "A 1% point reduction as was being earmarked in the same scheme was both unattractive and did not go far enough to provide the access to finance that businesses at this crucial point in time required. This public health crisis which is affecting all sectors of the economy required bold measures that at that point were not being implemented. Today both the GBC and the GTA note with satisfaction that Government has entered into the prerogative of guaranteeing 90% of the loans to businesses, and of covering 2.5% of the interest that is being charged by commercial banks for the first two years."

"These are positive steps which will ensure that Malta's economy and its businesses will continue to weather the storm, and that they will be prepared to continue competing once this crisis is over."

Both the GBC and the GTA positively note that their suggestions were taken on board providing better access to finance, and completing the fiscal and financial package that is being offered by the Government. "The matter is now in the hand of the local Banks. GBC and GTA are convinced that the local Banks will shoulder with responsibility their duty to make funds accessible to local businesses at very low rates, given that the loans are Government guaranteed. It is suggested that arrangement fees are also waived. As we have already stated, unprecedented events need an unprecedented response and Banks are invited to be participative in this collective effort."

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