Further Studies Made Affordable Plus (FSMA+)

FSMA+ builds on the success of its predecessor, the FSMA scheme, through which by end September 2021 around 250 students have benefitted from over €8 million in soft loans to undertake specialised studies in various disciplines.

Thanks to the European Social Fund (ESF) and European Social Fund Plus (ESF+), the Managing Authority (MA) allocated €5 million to support the FSMA+ scheme. The MDB has been entrusted by the MA to implement the FSMA+.

The FSMA is a blended financial instrument, combining two components: a grant element in the form of an interest rate subsidy that makes the instrument more appealing for aspiring students, and a guarantee that enhances student access to bank financing by absorbing a substantial part of the risks.

Close to half of this amount will be in the form of a grant subsidising the interest payments during the moratorium period. The MDB will again provide a First Loss Guarantee covering 80% of individual loans, capped at 25% of the commercial bank’s portfolio, generating a multiplier of 5, meaning that a total portfolio of circa €15 million will be made available.

Terms & Conditions
Product OutlineFSMA+ is​ targeted towards students aiming at furthering their educational attainment. The scheme is financed under the ESF and ESF+.
ObjectiveFSMA+ seeks to support students in pursuing higher level of studies at internationally recognised institutions by facilitating access to more affordable financing. FSMA+ will be made available to students through MDB’s intermediating partner/s which shall be announced following the finalisation of the selection process.
StructureThe MDB provides a First Loss Guarantee covering 80% of all individual loans under the scheme which is capped at 25% of the commercial bank’s portfolio earmarked for such loans, generating a multiplier of 5. Thus, a fund of €3 million stimulates up to €15 million of new eligible loans. 

The financial instrument is divided into two elements: (i) Guarantee element: portfolio capped financial guarantee providing credit risk coverage on a loan by loan basis for a portfolio of newly originated eligible loans; and (ii) Interest rate subsidy element: the interest rate subsidy will be utilised to cover all the interest incurred during the moratorium period plus one year of each Eligible Loan.
Banking FacilityThe maximum size of eligible loans guaranteed under the facility is €100,000, with a maximum loan term of up to 15 years, including the moratorium period. No minimum loan size is applicable.
Loan eligibilityThe loan should be tied to students pursuing a study programme which is an accredited course in MQF levels 5, 6, 7 and 8, as well as internationally recognised certificates. The loans are available for full time and part time studies. The loan will finance tuition fees, living expenses, accommodation fees, transport expenses, textbooks and related expenses.
Eligible applicantsThe applicant has to be a Maltese citizen; or national of an EU/EEA Member State provided that such person has obtained permanent residence in Malta or is in Malta exercising his/her EU Treaty rights as an employee, self-employed person or person retaining such status. The applicant can also be a third country national who has been granted long-term residence status in Malta.
BenefitsA maximum term of capital moratorium that covers the term of the course plus an additional twelve months, subject to a maximum moratorium period of five years. No interest during the moratorium period.  The interest due during the moratorium period is fully covered by an interest rate subsidy, placing no payment obligation on the student during this period of low or no income.

Attractive interest rate, no collateral or upfront contribution shall be requested by the partnering financial intermediary.
Application processThe scheme is available through MDB’s partnering financial intermediary – Bank of Valletta

FSMA+ Financial Instrument Application Details

Commercial banks licensed to operate under the Banking Act, Chapter 371 of the Laws of Malta are invited to submit a proposal as financial intermediaries of the FSMA+ scheme.  

All relevant details and documentation can be found below.