Subsidies by banks


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The CIRSS has been approved by the European Commission on 14 May 2020 under the Temporary Framework for State Aid measures to support the economy in the current COVID-19 outbreak. The interest rate subsidy will apply automatically to all recipients of working capital loans approved by accredited commercial banks under the CGS.

Through the CIRSS, all beneficiaries under the CGS are eligible for a grant of up to 2.5 percentage points on the interest on the loan 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. By way of example, if the bank interest rate is 2.5%, for the first two years, the borrower pays 0.1% plus the applicable guarantee fee. If the bank interest rate is 3.5%, for the first two years, the borrower pays 1% plus the applicable guarantee fee.  

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.