Issue link: https://maltatoday.uberflip.com/i/573382
maltatoday, SUNDAY, 20 SEPTEMBER 2015 12 News A 'credit gap' for Maltese business- es is likely to persist and widen fur- ther in 2016, according to Central Bank experts who mapped out an estimate of the shortfall in banking credit. The gap is expected to widen to around €840 million and €1.15 billion by end-2016, up from its present €680-830 million gap. CBM experts said that despite a buoyant growth in GDP – up 11% above the pre-2009 crisis peak – credit growth to non-financial cor- porations has been on a downward trend since 2008, turning negative since 2012. The credit gap is the difference between the credit-to-GDP ratio, and its long-term trend. Loans to such businesses total some €3.6 billion, a level last seen in 2008 and in terms of GDP, a his- torical low not seen from the mid- 1990s. Experts said the extent of the decline in credit to businesses – which are heavily dependent on bank finance – was "surprising" given the growth performance of the Maltese economy and low job- lessness. Construction was the most to suffer from the tightening on cred- it, but banks have also shifted their loan portfolio to households. "Despite the resilient perform- ance of the domestic economy, credit to the private sector has been on a downward trend… Evidence suggests that changes in the bank- ing sector landscape, higher pric- ing of loans and somewhat tighter credit conditions, all of which are supply-related, have played an im- portant role," said Brian Micallef, the senior research economist who carried out the Central Bank study. Additionally, only around 50% of the cuts in interest rates mandated by the European Central Bank have been transmitted to interests rates to businesses since 2008 – a source of concern to the Central Bank. "In Malta the overwhelming majority of businesses are micro- enterprises or SMEs, which in the absence of a deep and liquid capi- tal market and without the access to external financing from parent companies, are generally more re- liant on bank financing than larger firms," Micallef warns, adding that further restriction of credit lines could ultimately impact upon the economy itself. THE Filipino press has raised questions over a decision by their Italian consul to rent a passenger ship for €1.6 million to evacuate overseas Filipino workers (OFWs) from Tripoli in August 2014, in- stead of Virtù Ferries' high-speed catamaran ship. 766 Filipino workers were evacu- ated in 2014 from Libya via Malta, and there were complaints later about the harsh conditions they experienced on board the gov- ernment-chartered ship, the F/B Bridge. "Upon their arrival in Manila from Malta, the evacuees showed the media cell phone camera re- cordings of their voyage, which include footage of them sleeping on the ship's floor and of not be- ing provided with food or water on the long day's journey from Libya to Malta," the Philippines Daily In- quirer reported. Questions on the F/B Bridge contract were raised in Malta at a summit of the European Network of Filipinos in the Diaspora (EN- FID) with the outgoing consul of the Philippines in Malta, Kevin At- tard – the CEO of Attard Services Ltd. Attard said he had negotiated a reduced price of €300,000 for Virtù Ferries' catamaran, which had been used by the US embassy in the evacuation of its nationals from Libya during the civil war. But the Philippines' consul-gen- eral in Rome, Leila Lora-Santos made contact with him to inform him that other arrangements had been made. Instead a contract was signed with Alex Polidano of Ocean Ma- rine Services for the F/B Bridge for an alleged $1.8 million. MATTHEW VELLA WHEN you book your Airbnb apartment on Rue Faubourg Saint Martin in Paris, it will usually be the owner's friend who is waiting round the corner to give you the key to the place – not some reception- ist. At €70 a night for a tiny, two- bedroom sixth-floor apartment with no elevator (you also have to feed the cat because the owner's away, of course) and self-catering, this might be a more authentic and cheaper accommodation to savour the city. But it is the economics of the has- sle-free renting of Airbnb's tech- nology that is worrying hoteliers. Just like Uber allows people to turn their own cars into taxis, much to the consternation of licensed taxi drivers, so is Airbnb getting ho- teliers' dander up as MHRA's An- thony Zahra was quick to point out this week. There was an increase in arriv- als of 8% between the second and third quarter this year, and yet Zahra says the only increase in ac- commodation was registered by private accommodation at 9%. "We [hotels] stayed where we were," he said of the data collected from the National Statistics Office's surveys of departing tourists. Zahra used this data to lay out his demand for proper licensing of any private accommodation. In a nutshell, if hotels must be licensed on health and safety regulations, so should anyone renting out their spare bedroom. "Whatever applies to a hotel in terms of licensing should also apply to any other premises being rented to tourists. They must come in line with the rules – not more rules, just comply with the present rules," Za- hra said, demanding a level playing field for anyone in the business of accommodation. "If the government says that MHRA members should be li- censed, then it should apply to any- one putting up their apartments for tourist accommodation. If you need a fire preventive system in a hotel, should it not apply for an apartment welcoming tourists?" Zahra deflected claims that MHRA's beef was with the sharing economy's intelligent use of tech- nology. "I'm not trying to keep the world from turning, but it cannot be that licensed hotels are disadvantaged by unlicensed accommodation. So what if somebody dies in one of these apartments because of some fire hazard? Will the government then license these places? It's that kind of accident that would hurt the industry. But if you're welcom- ing tourists in your home, you're in the business as much as I am – and that means you should be subject to rules much as I am." Zahra's concerns are no mere angry demands. The effects of the sharing economy prompted by Uber and Airbnb has elicited an- gry protests in Barcelona and the Greater London assembly. The Catalan capital banned Uber, and hit Airbnb with heavy fines for not being registered just like other pri- vate BnBs. Malta has some 260 vacation list- ings on Airbnb, all commanding rents at premiums that raise the is- sue of whether all this money even gets declared for tax purposes when most of it is paid via Paypal or with cash in hand. Only this week, Milan and Lom- bardy regions exempted residents who share their homes using Air- bnb from normal registration rules. "Rules for home sharing in Lom- bardy were confusing, including complex registration requirements. They were designed for businesses and professionals, and could be dif- ficult for regular people to under- stand," Airbnb said. The new rules basically recognise that Airbnb hosts are regular peo- ple sharing their homes and that is a non-professional activity. Instead they will have to notify the authori- ties that they are home-sharing. Airbnb eating into hotel revenues, MHRA boss says Central Bank: Tighter bank credit lines to businesses will persist into 2016 Malta evacuation from Libya irks Filipinos Anthony Zahra