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5 NEWS 27.5.2021 FROM PAGE 1 The CGS was launched by the MDB in April 2020 and has since assisted more than 560 businesses, collective- ly employing over 40,000 persons. The supported businesses, which received a total of more than €440 million in working capital loans through nine partnering commercial banks, range from hotels to large re- tail outlets but also to smaller firms across all economic sectors. The scheme facilitated access to fi- nance to businesses whose liquidity was seriously affected by the pan- demic. The CGS greatly enhances access to bank financing to cover working capital costs, at lower inter- est rates and lower collateral require- ments. Firms in the tourism-related sectors (particularly accommodation & food services activities, and wholesale & retail activities), which were the most adversely impacted by the pandemic, have collectively been granted close to €200 million, or over 45%, of total loans sanctioned under the CGS. Bonnici said he was extremely sat- isfied that nine commercisl banks had signed up to participate in the scheme; of those, eight had never participated in a guarantee scheme before. "The banks quickly agreed to sign up and agreed to two majore stipula- tions," he said. "They had to sign a risk-sharing agreement and they also had to sign a service-level agreement." Under the risk-sharing agreement, banks agreed to lower interest rates on loans granted to businesses under the scheme. And the service-level agreement grants MDB the right to oversee and audit the bank's processes and trans- actions under the scheme, to confirm full compliance with its parameters. After all, the MDB and the scheme too are subject to audit by the Euro- pean Commission or the NAO. Bonnici said the scheme had been successful also becuase, thus far, only banks' funds had been and there has, as yet. been no need for the govern- ment to provide any money to cover its guarantee. "What we have done is unleash the facilities of commercial banks to sof- ten the blow the pandemic was prov- ing to have on Maltese businesses," Bonnici told BusinessToday. "Commercial banks are making a small return while utilising their funds to sustain the economy with- out endangering their own economic standing." During the first twelve months of the CGS operations, the average loan per facility of the 560 beneficiaries stood at around €785,000. Out of these beneficiaries, 500 firms, almost 90% of the total, were SMEs. The average loan size of SMEs amounted to around €470,000, as op- posed to an average of €3.1 million granted to larger entities. The CGS and other initiatives man- aged by the MDB have contributed significantly to improving liquidity and access to finance on a national level. As at end of the first quarter of 2021, loans covered by MDB guaran- tee schemes accounted for more than 10% of the over €4 billion outstand- ing loans extended to non-financial corporations (NFCs). Official data also shows that dur- ing the same timeframe, lending to NFCs expanded by an annual rate of close 8.0% in March 2021. Without this MDB's intervention, such lend- ing would instead have contracted by 4.0%. Extending the CGS The MDB has recently obtained the European Commission's approval to prolong the applicability period of the Scheme by a further three months to 30 September 2021. Moreover, the Commission also ap- proved that the maximum morato- rium period that commercial banks can provide under the CGS, which now can be extended by a further six months up to 18 months, on a case- by-case basis. Average loan per facility stood at around €785,000 MALTA DEVELOPMENT BANK COVID-19 GUARANTEE SCHEME APS Bank has received the 2021 National Prize for the Promotion of Arts and Culture, awarded by Arts Council Malta. is important milestone recognises the Bank's unstint- ing commitment and investment in this area over the years. From exhibitions to publications, from heritage conservation to all genres of performing arts, across pe- riods ranging from the medieval to the contemporary, the Bank has been a leading promoter of the arts in their var- ious forms. Last year, during the pandemic, APS Bank also organised the APS Summer Festival, reinforcing its support towards community events and the artists during these challenging times. "is award acknowledges the efforts and contribution of the Bank towards culture in its different forms," Herve Delpech, Chief Strategy Officer at APS Bank, said. "It is also a strong encouragement for APS Bank to con- tinue promoting culture, with drive and passion, for the benefit of all." Left to right: Ryan Muscat Verzin (Graphic Designer & Social Media Officer), Jeremy Vassallo (CSR Manager), Patrick Aquilina (Business Process Reengineering Lead), Leanne Bugeja (Senior CSR/ Marketing Officer), Herve Delpech (Chief Strategy Officer), Aida Cassola (Marketing Manager), Bartolo La Gristina (Digital Marketing Officer), and Marcel Cassar (Chief Executive Officer) APS Bank awarded National Prize for the Promotion of Arts and Culture

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