The Further Studies Made Affordable (FSMA) scheme is a blended financial instrument offering a combination of a guaranteed soft loan and a grant in the form of an interest rate subsidy. It is an innovative scheme providing soft loans targeted for individuals seeking further studies. FSMA is financed under the Operational Programme II – “Investing in human capital to create more opportunities and promote the wellbeing of society”, co-funded by the European Social Fund Programme 2014-2020. The scheme is offered through the collaboration between the Malta Development Bank, Bank of Valletta and the Managing Authority for EU Funds.
The objective of the financial instrument is to support the development of human capital and is aimed to meet the financing needs of students seeking to pursue a study programme for accredited courses in MQF levels 5, 6, 7 and 8 as well as other internationally recognised certificates. The eligible students are entitled to receive support for the activities related to tuition fees, accommodation costs, subsistence expenses and other expenses to further their studies in Malta and abroad.
Loans under this facility can be up to a maximum of €100,000 with a term of up to 15 years including a maximum moratorium period of 5 years. Students benefit from a subsidy on all the interest payments during the moratorium period which is being financed through a grant, and an attractive interest rate thereafter. Due to the guarantee of 80% provided by the MDB, no collateral or up-front contribution will be requested from the student.
FSMA was launched in October 2019 with an initial allocated ESF budget of €2 million which was leveraged to a maximum loan portfolio volume of €5.5 million covered by a maximum guaranteed amount of €1,100,000 and an interest rate subsidy of a maximum of €900,000. Following stronger than anticipated demand, in December 2020 the ESF allocation to the FSMA was raised to €3 million which enabled the maximum portfolio volume to be increased to €8,250,000, covered by a maximum guaranteed amount of €1,650,000 and an interest rate subsidy of a maximum of €1,350,000. In August 2021, the portfolio was extended by a further €1.2 million, to €9.45 million.
Performance of FSMA
By February 2022, 277 students have been supported under the FSMA scheme. Out of these beneficiaries, 175 are males, whereas 102 are females. Total loans under this scheme reached €9.2 million. The beneficiaries are aged between 19 and 50 years. However, over 80% of all beneficiaries are in the 19-30 age cohort, with a median age of 25 years old. The overall average loan size reached €33,350, which is much higher than what commercial banks are willing to offer in absence of such a guaranteed scheme.
The most popular courses were for MQF 7, which is equivalent to a Master’s degree, with 142 students, or 51.1% of the total, followed by 89 beneficiaries opting for internationally recognised certificates, predominantly including courses for aircraft pilots. Reflecting the substantial costs related to the latter professional courses, the total amount sanctioned for international recognised certificates accounted for close to 52.3% of the total funds. Moreover, MQF 6 level courses were taken by 35 beneficiaries, whilst loans to students pursuing MQF levels 5 (diploma) and 8 (PhD) were both taken by 6 beneficiaries each.
The facility was made available by Bank of Valletta, acting as implementing partner of the MDB, through the BOV Studies Plus. Bank of Valletta was selected following a closed call for service.
Following the success of the FSMA, on 8 February 2022, the MDB launched a new scheme, the FSMA+. As a consequence, the availability period of the FSMA scheme was terminated. New loan requests will now be accommodated under the FSMA+ scheme. Bank of Valletta plc was selected to intermediate the new scheme through another closed call for service. More information is available here.
TVM – EUR 5.5 Million for over 400 Students Wishing to Continue Studying from Diploma to Doctorate
One News – Imħabbra skema ta’ €5.5 miljun biex student ikomplu jistudjaw
News Book – Easier Access to Further Studies With BOV Studies+
FSMA Financial Instrument Application Details
This call had closed on 26th July 2019. All relevant details and documentation can be found below: