UPDATE – 26/03/2021

As announced at the press conference held on the 24th March 2021 and in the Press Release PR210573 issued on 24/03/2021 by the Department of Information:, and in view of the ongoing economic and social restrictions introduced by authorities to stem the flow of the pandemic in Malta, the highly successful Covid-19 Guarantee Scheme will be extended in time and scope, in order to support local entrepreneurs in facing the challenges of the present situation.

The extension will apply to both the timeframe of the scheme, as well as its applicability. Subject to a European Commission notification soon to be finalised, the Scheme itself will be extended from 30th June to 30th September, while the maximum moratorium period will be extended by an extra 6 months to a total of 18 months, on a case by case, at the discretion of banks.

Moreover, an important development for businesses is that, with immediate effect, the definition of working capital now includes regular loan repayments (interest and capital) of bank loans approved on or prior to 23 March 2021, subject to certain terms and conditions. The scheme already covers various recurring expenses such as salaries, rental payments, utility bills and other payments of an immediate nature.

Through the Covid-19 Guarantee Scheme, the Malta Development Bank is providing businesses with a lifeline through easy access to otherwise-unavailable bank loans, reduced collateral requirements, highly subsidised interest rates on loans, and a moratorium on repayment of both capital and interest.


Download Press Release

The MDB COVID-19 Guarantee Scheme (CGS) provides guarantees to commercial banks in order to enhance access to bank financing for the working capital requirements of businesses in Malta facing a sudden acute liquidity shortage as a result of the COVID-19 outbreak.

The CGS has been approved by the European Commission on 2 April 2020 under the Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak (European Commission Press Release).

CGS is part of the wider package of Government’s COVID-19 Response Support Programme.  

A Guarantee Fund of €350 million has been allocated by Government for the purpose of guaranteeing loans granted by commercial banks in Malta to meet new working capital requirements of businesses facing cashflow disruptions due to the effects of the COVID-19. 

The CGS enables the commercial banks to leverage Government’s guarantees up to a total portfolio volume of €777.8 million to support all types of businesses.

The CGS has been entrusted to the Malta Development Bank (MDB) which is responsible to develop, administer and implement the scheme. The CGS will be intermediated via commercial banks in Malta.  

Loans are available from the commercial banks accredited by the MDB. 

Loan applications are assessed by the commercial banks in line with their credit policy criteria. Final approval rests with the commercial banks. 

Information for Businesses

Loan Features

Maximum Individual Loan Amounts

  • Small and medium-sized enterprises (SMEs): €2 million
  • Large enterprises: €5 million
  • Amounts higher than €2 million but limited to a maximum of €10 million for SMEs; and amounts higher than €5 million but limited to a maximum of €25 million for large enterprises, require the prior ad-hoc approval of MDB.

Provided that such amounts do not exceed:

  • Double of the annual wage bill of the beneficiary; OR
  • 25% of total turnover of the beneficiary in 2019
  • a higher amount, subject to appropriate justification and self-certification, to cover the liquidity needs of SMEs for the coming 18 months and of large enterprises for the coming 12 months.

Interest Rate: To be determined by the commercial bank. Commercial Banks would need to give an interest rate reduction to beneficiaries of at least one percentage point on the average lending rate as compared to similar facilities prior to the introduction of the guarantee scheme.

Loan Term: Minimum 18 months to maximum of 48 months. The term can increase to 72 months, subject to additional terms and conditions.  Loan terms longer than 72 months will not be covered by the CGS..

Moratorium: Minimum period of 6 months with the possibility to extend to one year on a case-by-case basis. The moratorium applies to both interest and capital repayments. 

Eligible Costs included in Working Capital

The CGS covers new working capital loans. Eligible costs under these loans mainly include, but are not limited to:

  • Salaries of employees, including social and health security payments
  • Lease of establishment, including rental costs, energy and water bills, fuel etc.
  • Unpaid invoices due to a decrease in business revenues in respect of working capital and other similar commitments and in respect of investment expenditures provided that investment expenditures only qualify under the Scheme if they were contracted for prior to the approval of this Scheme by the Commission
  • Acquisition of material and stock for continuation of business
  • Expenses directly related to contracts which were cancelled or postponed because of the COVID-19 outbreak excluding penalties and other liabilities incurred due to non-performance of contracts
  • Maintenance costs
  • Bond coupons on listed securities
  • Regular loan repayments (principle & interest) on loans held with banks which were approved and signed pre 24th March 2021 subject to terms and conditions

The CGS shall not cover restructuring or rescheduling of existing facilities. 

Eligible Beneficiaries

The CGS covers all business undertakings established and operating in Malta, being both SMEs and large enterprises.  The main factors determining whether an enterprise is an SME are the staff headcount, and, either turnover or balance sheet total.

SMEs are defined in the EU Recommendation 2003/361 as per the table below:

Company category

Staff headcount



Balance sheet total


< 250

≤ € 50 m

≤ € 43 m


< 50

≤ € 10 m

≤ € 10 m


< 10

≤ € 2 m

≤ € 2 m


Guarantee Fee

For loans with an initial maturity of up to 4 years:


For 1st Year

For 2nd Year

For 3rd Year

For 4th Year






Large Companies





For loans with an initial maturity of up to 5 or 6 years:


For 1st Year

For Years 2 & 3

For Years 4 to 6





Large Companies




Where to Apply for a Loan

Business undertakings wishing to avail themselves of the facilities covered by the MDB’s CGS should contact any one of the accredited banks listed below to enquire on their eligibility and other information on the CGS. 

 The following are the accredited commercial banks offering facilities under the CGS:

  • APS Bank (Click Here to visit APS Bank information page)
  • Bank of Valletta (Click Here to visit Bank of Valletta information page)
  • BNF Bank (Click Here to visit BNF Bank information page)
  • FCM Bank (Click Here to visit FCM Bank information page)
  • FIMBank plc (Link to bank information page to follow)
  • HSBC Bank Malta (Link to bank information page to follow)
  • Izola Bank (Click Here to visit Izola Bank information page)
  • Lombard Bank (Click Here to visit Lombard Bank information page)
  • MeDirect (Click Here to visit MeDirect information page)

MDB will soon be uploading a FAQ section to provide more information and clarifications on the CGS.

Information for Potential Financial Intermediaries

The CGS is open to all credit institutions licensed in Malta that during 2019 were providing banking facilities to local enterprises for working capital purposes.  

The CGS covers 90% of each facility, capped at 50% of the actual portfolio volume. 

A copy of the Term Sheet governing the CGS is available on-demand from the MDB.

In view of the credit enhancement and substantially reduced credit risk exposure provided by the CGS, the advantages should be passed on to the largest extent possible to the final beneficiaries including in the form of:

  • higher volume of finance,
  • riskier portfolio, 
  • lower collateral requirement, and 
  • lower interest rates

Commercial Banks would need to give an interest rate reduction to beneficiaries of at least one percentage point on the average lending rate as compared to similar facilities prior to the introduction of the guarantee scheme. 

To become a financial intermediary of the CGS, interested credit institutions need to submit the Expression of Interest Form which can be downloaded from this link.

Download Expression of Interest Form

The MDB and each financial intermediary will enter into a Risk Sharing Agreement and Service Level Agreement, regulating the relationship of the parties in relation to the CGS.  Copies of the Risk Sharing Agreement and Service Level Agreement governing the CGS are available on-demand from the MDB.