Issue link: https://maltatoday.uberflip.com/i/1440009
16 maltatoday | SUNDAY • 2 JANUARY 2022 NEWS THIS CHRISTMAS, THE PERFECT GIFT IS LOVE. WITH YOUR DONATION, WE CAN HELP THOSE IN NEED. www.richmond.org.mt/the-gift-of-therapy/ MATTHEW VELLA BUSINESS loans subject to a 'COVID' moratorium have fall- en consistently since August 2020 and reaching very low lev- els recently, with the moratoria period gradually expiring for many borrowers as economic activity continued to normalise. A Central Bank economic up- date found that as at the end of October 2021, only 28 loans were still subject to a moratori- um on repayments, compared to 54 loans a month earlier. The value of such loans de- clined by €7.8 million from Sep- tember and stood at €26.5 mil- lion, or 0.2% of total outstanding loans to Maltese residents. The outstanding value of loans sub- ject to a moratorium of Maltese households fell to €0.4 million in October – equivalent to 1.4% of the total value of loans sub- ject to a moratorium. In response to the outbreak of COVID-19 and the subsequent containment measures, sever- al businesses and households were faced with liquidity chal- lenges. A peak on these moratoria loans was in July 2020, at €635 million. Firms held €26.1 mil- lion in loans subject to a mor- atorium at the end of October, accounting for most of out- standing loans still covered by moratoria. The largest number and val- ue of loans subject to a mor- atorium were held in the ac- commodation and food service activities sector. This was the sector most affected by the con- tainment measures, with 1.5% of the loans held by this sector subject to a moratorium by the end of October. This contrasts with the end of 2020, when over 40% of outstanding loans of this sector were subject to a mora- torium. To further alleviate liquidity challenges, the Maltese gov- ernment launched the Malta Development Bank COVID-19 Guarantee Scheme (CGS) to guarantee new loans granted by commercial banks for working capital purposes to business- es facing liquidity shortfalls as a result of the pandemic. The scheme enabled credit institu- tions to leverage government guarantees up to a total portfo- lio volume of €777.8 million. By end-October 2020, 652 fa- cilities were approved under the CGS, covering total sanctioned lending of €508.6 million. By the end of October, €434.9 million were disbursed, up slightly from the €414.5 million disbursed by the end of Sep- tember. As the scheme provides guar- antees on new loans for working capital and on loan repayments, the amount of loans disbursed under the scheme may be lower than the sanctioned amount. By the end of October, 65.4% of the scheme was sanctioned, while 55.9% was disbursed. COVID moratorium loans keep falling at end-2021