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EU Commission approves Malta’s Interest Rate Subsidy Scheme

EC approves Malta’s Interest Rate Subsidy Scheme

On 14 May, the EU Commission approved Malta’s Interest Rate Subsidy Scheme under the State aid Temporary Framework as extended to date.

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On 14 May 2020, the EU Commission approved Malta’s Interest Rate Subsidy Scheme under the State aid Temporary Framework as extended to date. The aid may be granted by no later than 31 December 2020.

The Interest Rate Subsidy Scheme has been launched locally on 16 April and is aimed at supporting businesses facing acute liquidity shortages due to the current COVID-19 pandemic. Through the Scheme, beneficiaries are eligible for a subsidy of up to 2.5% on the interest on loans from banks for the initial two years of the loan. The borrower has to pay an interest rate of at least 0.1% on the loan, net of the guarantee fee. The Scheme is in addition to COVID-19 Guarantee Scheme which guarantees loans granted by commercial banks in Malta to meet new working capital requirements of businesses facing cashflow disruptions due to the COVID-19 pandemic.

According to the Malta Development Bank, which is responsible for the administration of the schemes, the interest rate subsidy will apply automatically to all recipients of working capital loans approved by accredited commercial banks under the COVID-19 Guarantee Scheme.

Businesses wishing to avail themselves of the schemes should contact any of the accredited commercial banks (BOV, APS Bank, MeDirect, Lombard Bank, Izola Bank, FCM Bank and HSBC*).

*HSBC added to the list on 21 May 2020

Should you have any queries or wish to discuss further, please send an email to covid@kpmg.com.mt.

EU Commission approves Malta’s Interest Rate Subsidy Scheme

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

© 2020 KPMG, a Malta civil partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

KPMG International Cooperative (“KPMG International”) is a Swiss entity.  Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

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