The Malta Development Bank is currently undertaking a major revamp of its Family Business Transfer Facility, a scheme which seeks to assist and facilitate family businesses to transfer their business from one generation to the next.

Following extensive feedback received after  the scheme had been on the market for more than two years, the bank has embarked on a research-based product review and reengineering process. This review included three key processes, namely a market survey, an extensive consultation process and research of similar projects and schemes in comparable jurisdictions in other EU member states.

The market survey yielded some very interesting and encouraging results, notably that 37% of respondents are eyeing a business expansion, while 25% are considering selling their business over the next five years. Of particular interest to the MDB, the survey shows that most of the companies who were reluctant to engage in future business transfers opined that if an attractive business transfer financial instrument is readily available, they will be more inclined to consider selling or acquiring a business entity.

Stakeholders that were consulted in this process included organisations such as the Malta Chamber, the Malta Employers Association, the Malta Chamber for SMEs, the Family Business  Office, the Gozo Business Chamber, the Gozo Regional Committee, as well as Malta Enterprise and Business First.

The current review is looking at redifining the facility, primarily by broadening eligibility beyond the mere legal definition of family businesses. The terms of the modified facility would comprise the acquisition or disposal of a broader class of businesses. 

MDB chief Executive officer Rene Saliba explained that "discussions with our stakeholders indicate that the redefinition of the scheme with a broader context would enable the banks to build a larger portfolio of business transfer loans, allowing economies of scale in the operationalisation of such programmes, as well as greater diversification of risk and consequently more benefit pass-through to all beneficiaries".

The bank's chairman, Prof. Josef Bonnici added: "As a country we invest - rightly so - significant efforts in attracting new businesses to our shores. However, closer to home, sometimes we are missing on significant economic potential where years of enterpreneurial effort is lost as businesses fail to regenerate and succeed in the long run. This is a loss of potential growth and job creation and the reason why we are looking at enhancing this product to make it more attractive to potential beneficiaries."

The renewed facility is expected to be launched on the market in the coming months.