MBR Issue 45

Malta Business Review
INVEST
Supporting a Future Entrepreneurial Malta
Parliamentary Secretary for EU Funds and Social Dialogue Aaron Farrugia addressed a seminar on the EU-funded INVEST project, with
the topic of financial and forecasting models for entrepreneurs. The opening address was delivered by the Minister for Education and
Employment Evarist Bartolo.
Farrugia explained how the Government
is acting as a platform to support a future
entrepreneurial Malta, ready to drive the
country’s digital transformation in a world of
hyper-innovation.
Addressing an audience of entrepreneurs,
Farrugia spoke of the importance of
entrepreneurship as it creates new companies,
opens up new markets and nurtures new skills,
and is therefore a vital driving force for job
creation and economic growth. He recalled
that since joining the European Union in 2004,
Malta has worked hard to capitalise on the
funding opportunities provided to the member
states – particularly in regards to structural and
cohesion funds.
Enterprises are being supported through EU
funds when undertaking investment projects
aimed at securing sustainable business growth,
by becoming more competitive, innovative
and more resilient to market challenges.
The Parliamentary Secretary explained how
EU-funded projects have contributed to the
economic and financial sustainability of Malta’s
fast-growing economy. “Whether it is through
the €30 million we are investing in SMEs, the
€20 million we are investing in research and
development, the Kappara and Marsa Junction,
financial instruments in loans and guarantees
or the ESF funds for the reskilling and upskilling
of our workforce, they all contribute to Malta’s
economic growth. For the next EU budget post-
2020, we are planning for these programmes to
be simplified and flexible,” he said.
The Business Enhance Schemes, which are
part-financed by the European Regional
Development Fund 2014-2020, seek to support
enterprises, mainly SMEs and start-ups, through
the provision of a non-repayable grants. The
scheme includes the Start-Up Invest Grant
Scheme with a maximum grant of €300,000; the
SME Growth Grant Scheme with a maximum
grant of €500,000; SME Diversification and
Innovation Grant Scheme having a maximum
grant of €200,000; SME Internationalisation
Grant Scheme having a maximum grant of
€10,000; e-Commerce Grant Scheme having
a maximum grant of €5,000; and the SME
Consultancy Services Grant Scheme having a
maximum grant of €4,000.
So far, 145 SMEs have already benefitted from
funds under the 2014-2020 programme. A total
of €51 million have been allocated towards
providing financial assistance to SMEs. An
agreement was also recently signed with the
EIB group and the European Commission to
increase financing available under the SME
Initiative in Malta.
The initial SME Initiative in Malta has allowed
the Bank of Valletta and BNF Bank to deliver
approximately €60 million of new SME financing
across the country within less than three years.
“Due to the successful uptake of this initial
agreement, we, together with the EIB Group and
the EC have decided to add additional resources
to this initiative. This increase will trigger
additional SMEs financing for an amount of €28
million, resulting in more SMEs benefiting from
European resources on advantageous terms,
such as reduced interest rates and improved
collateral requirements, bringing the total SME
financing to around €90 million,” Farrugia said.
Other EU-funded opportunities include the
Erasmus for Young Entrepreneurs, a crossborder
exchange programme which enables
aspiring young entrepreneurs to learn from
entrepreneurs with experience, as well as The
Youth Employment Initiative, which supports
unemployed young people who are currently
not enrolled in education or training in regions
with a youth unemployment rate above 25%.
The Youth Guarantee is a guarantee made
to unemployed people under 25 — whether
registered with job-search services or not —
that they will get a good-quality, specific offer
of work within four months of leaving formal
education or becoming unemployed.
"A total of €51 million
have been allocated
towards providing
financial assistance to
SMEs
Aaron Farrugia, Parliamentary Secretary for EU Funds
Similarly, the Interreg projects are EU-funded
programmes for territorial cooperation through
which Maltese entities get to learn from our
European counterparts and become aware of
best practices, which are then implemented
locally. “Such projects are also excellent
platforms for building relationships with our
foreign colleagues, whilst learning in the
process and passing on some of our ideas and
experiences too. The outcome of these projects
or their pilot-actions, feed in national policy
papers or even serve as an important baseline
for larger projects financed through other EU
sources or national funds,” Farrugia said.
With Brexit leaving a €13 billion gap in the EU
budget, and issues of migration, defence and
security being given priority, Malta`s private
sector should do more and better to tap into
centralised EU funds. In this regard, Farrugia
referred to an action plan announced last
month through which Malta can make better
use of funds from direct EU funds after 2020 –
such as Horizon 2020, Life+ and creative Europe,
amongst others, through the setting up of a
new division focussed solely on this, which will
fall under the division for programme funding.
Challenges remain, as the November 2017 EU
report 'SME Performance Review' outlines
that newly founded entities ‘created by selfemployed
have survival rates typically between
30-60 % after the first five years, and Microentrepreneurs
are disadvantaged compared to
Larger Enterprises.
“Let’s face these challenges while consolidating
this present regulation and taxation system that
nurtures champions. A system that fosters capital
investment and encourages entrepreneurs and
investors to finance this current productive
economy,” Farrugia said. MBR
Creditline: Parliamentary Secretary for EU Funds
and Social Dialogue/DOI
38