Market Gaps on Access to Finance - Bank of Valletta

Malta Business Bureau – <strong>Market</strong> gaps in access to finance
April 2013
Figure 9: Reasons for not using sources of finance
%age of respondents
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
4%
63%
A: National
Grants/Public
aid
4%
56%
B: EU Funds
EU funds
Base: All respondents, for each type of finance
The figure above shows that most of the firms did not use or apply for equity sources, and the most
prevalent reason is because they are not deemed relevant to their firm (87% for private equity and
93% for public listing). Some responses for the “other” category related to respondents being
unaware of related advantages for the respective source of finance, respondents whose needs were
met through traditional bank finance, and the difficulty to find providers of finance locally.
A: National Grants/Public Aid
0%
21%
C: Bank
overdraft,
credit line or
credit cards
overdraft
0% 0%
34% 33%
National grants were used by only 26% of firms, with some firms having their national grant
assistance requests rejected. Rejections were reportedly mostly due to failure to meet application
requirements. About two-thirds deem these grants as not relevant to their firm.
Firms in the “medium” category used this type of finance most (33%, average: 26%). The
manufacturing and Life Science/ ICT firms were more likely to use this type of finance (50% and
43% respectively, average: 26%), while hotels and restaurants tended to use national grants less
often (9% and 10% respectively; average: 26%). Firms in the start-up and emerging growth stages
were the most frequent users of this source of finance (50% on both cases; average: 26%).
B: EU Funds
This type of finance was accessed mostly by “medium” firms (53%, average: 26%), and was used
less often by “micro” firms (16%, average: 26%), who were more likely to deem such funds not
relevant to their business (65%, average: 56%).
When analysed by sector, the responses show that the Life Sciences and ICT firms, and hotels (50%
and 45%, average: 26%) used this type of finance more often. Respondents in the retail and
distribution sector were more likely to consider these grants not relevant to their activities (71%,
average: 56%). Rejections for EU fund assistance related mostly to the manufacturing industry
(25%, average: 9%). Firms in their start up stage used EU funds more often (40%; average: 26%).
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6%
61%
D: Bank Loans E: Trade Credit F: Other loan
(e.g. related
company/
shareholders,
family, friends)
6%
66%
Did not use them – not relevant to my firm Did not use them – other reasons
8%
87%
G: Leasing/ H: Equity from
hire-purchase/ other Sources
factoring
7%
93%
I: Public issue
of own shares
or own bonds