The purpose of this facility is to assist and facilitate family businesses to transfer their business from one generation to the next.
This Guarantee scheme will complement the fiscal incentives offered by the Government in terms of the Family Business Act 2016. It is estimated that only a small proportion of family businesses manage to survive in the longer term. For instance, only around 12% of family businesses manage to transfer to the fourth generation. To date, banks have often been reluctant to provide credit for family business transfers because such transactions were perceived to add debt rather than value. The Family Business Transfer Guarantee Scheme should enable more family businesses to transfer their businesses, thereby ensuring continuity, stability and further growth in future of such businesses – which in Malta constitute a significant segment of the SME sector.
Through this agreement, the MDB will be contributing a partial credit risk protection on the lending portfolio of Bank of Valletta. The benefits from such risk-sharing will pass on to the ultimate beneficiaries in the form of better access to finance and with more accommodating terms and conditions.
A Family Affair – Safeguarding Malta and Europe’s Beating Heart
On 1st October 2018, Prof. Josef Bonnici, Chairman of the Malta Development Bank, opened the conference ‘A Family Affair – Safeguarding Malta and Europe’s Beating Heart’, the first event marking the SME Week hosted by the Chamber of Commerce.
“Through this agreement, the MDB will be contributing a partial credit risk protection on the lending portfolio of Bank of Valletta”
“Family businesses have a crucial role in the Maltese economy and thus they are a priority area for the Malta Development Bank.
The purpose of this facility is to assist and facilitate family businesses to transfer their business from one generation to the next”
