BusinessToday Previous Editions

3 NEWS 23.07.2020 FROM PAGE 1 In fact, just over 5% of the 251 busi- nesses that benefited from the scheme needed the massive loans to cover wag- es, overheads, regular maintenance and recurring expenditure. 78 businesses took out loans ranging between €250,000 and €2million. e MDB Guarantee Scheme was launched at the height of the coranavi- rus pandemic and covers 90% of each working capital loan to businesses whose cashflow has been impacted by the COVID-19 outbreak. By the end of June, 251 businesses had benefited from a lifeline of €200million in additional liquidity from local banks backed by the MDB's scheme. Because of the scheme, commercial banks could provide otherwise-unavail- able working capital loans with reduced collateral requirements, highly subsi- dised interest rates on loans, as well as a moratorium on repayment of both cap- ital and interest. BusinessToday is informed that the ab- solute majority of companies supported through the scheme - or more than 90% - were small and medium enterprises. e hospitality sector, which was probably the hardest hit during the pandemic, secured the largest value of sanctioned loans, with more than 25% of the total volume. e wholesale and retail sector followed with more than 22% of the portfolio. Businesses in the construction, trans- port and storage and the manufacturing sectors also took out loans under the scheme. With reference to the size of loans granted, 64% of applicants took out loans of less than €250,000. 31% of successful loan applications were for €250,000 to €2million, while the rest More than 31% obtained, through the guarantees provided by this scheme, loans ranging between 250,000 euro and €2million, while the remaining 13 businesses were granted loans of more than €2million each. e MDB scheme allowed these busi- nesses, regardless of their size and their economic sector, to obtain the necessary liquidity to cover salaries, rental payments, utility bills and other payments of an immediate nature. e money borrowed could not be used for new projects. Prof. Josef Bonnici, chairman of the MDB's baord of directors, said that de- spite Malta's success in dealing with the health aspect of the pandemic, the im- pact of the pandemic on businesses was inevitable. 'rough the guarantee schemes man- aged by the MDB, we have ensured that business owners are supported in their efforts to be resilient through these challenging times while most impor- tantly safeguarding the jobs these com- panies support," he said. "At the same time, we are also making it easier for the banks to continue pro- viding new loans which will be crucial in supporting the economy not only to survive but to regenerate itself and de- liver growth in the months ahead." It is estimated that the Malta De- velopment Bank Covid-19 Guarantee Scheme alone has helped safeguard more than 15,000 jobs thus far. 90% of MDB COVID-19 scheme beneficiaries were SMEs Prof. Josef Bonnici THE Malta Digital Innovation Authori- ty inaugurated its new offices in Mriehel on Tuesday. Spread across two levels, the new state-of-the-art building is finished to the highest levels and standards. At- tention was given to every little detail, in- cluding the use of the latest technology. MDIA Chairman Dr Joshua Ellul and Chief Executive Officer Stephen McCar- thy hosted the Finance Minister Edward Scicluna and Parliamentary Secretary for Financial Services Clayton Bartolo, for the official opening ceremony. ey were given a tour around both levels together with an explanation of how MDIA staff will operate in the digital innovation sec- tor. McCarthy said that back in 2018, the MDIA itself used to contact entities pro- posing the possibility of using new tech- nologies. In 2020, it is now the other way round, as entities are increasingly reach- ing out to MDIA to be assisted on the use of Distributed Ledger Technologies, Artificial Intelligence and more. Whilst discussions with legislators are ongoing, he noted that the Authority's remit will broaden much further in the coming years, as technology automation increases. Hence the new premises were a must to accomplish MDIA's vision and welcome a new era for the authority. Ellul spoke about the technology assur- ance framework which the Authority de- veloped. In doing so, the MDIA vetted, scrutinised and approved Systems Au- ditors, who are expected to uphold the same levels of standards and assurances in the innovative technology arrange- ments that they will be auditing. He said that innovation should not be stifled but supported, and therefore the framework is a voluntary one for non-critical systems, yet for critical sys- tems may be a requirement mandated by another lead authority. Scicluna said that the Government was always at the forefront to embrace the digital economy. He remarked that there needs to be a common and coordinated front so that the digital technology is promoted in a holistic way, especially in terms of financial competitivity. Bartolo noted how the MDIA was a crucial entity to keep the digital economy sector moving forward and how a lot of work was done to enable the Authority to continue to improving the digital sector. MDIA inaugurates new offices

• Cover