GRTU survey finds weak take-up of EU enterprise funds

Although government has put a lot of store in financing schemes such as employment aid, tourism funds, micro-invest and the ERDF competitiveness grants, the GRTU’s survey finds that most businesses find the effort required to apply for the funds by Malta Enterprise is too cumbersome.

Only 18% of 120 businesses who replied to the survey said they had used EU funds, although 97% said they were interested in applying for the funds.

However, only 13% felt they were enough schemes that could help improve their business and just 9% felt there was enough information about the funds.

The GRTU said the reasons for the little take-up were due to ‘loss of faith in Malta Enterprise’, a lack of effort in applying for the funds, little information and voluminous amount of forms for applying.

The survey was conducted among a cross-section of small businesses from various economic activities. GRTU issued 250 questionnaires and 120 of them were responded. “We are not really surprised, as the way these EU funded schemes are being sold still leaves a lot to be desired,” GRTU director-general Vince Farrugia said.

Farrugia said the schemes did not cater for businesses’ cash flow problems and lack of access to banking credit for capital investments. “They specifically deny them the option of financial re-packaging for firms who want to move further.”

Farrugia said that although substantial sums are being made available in loans and guarantees, the authorities are failing to understand business’s two crucial problems.

“Firstly it’s the long period of recession and poor growth that has had a terrible cash flow effect on many businesses as they retained their level of operations, including labour, even as gross private consumption went down and receipts from sales fell.

“Secondly, most firms are caught in a banking trap as soon as they plan to expand and move on to new projects. Saddled as they are with loan payments and large overdrafts, the space for new loans simply do not exist.”