‘Banks must reduce interest rates for small business’ – GRTU president

GRTU president Paul Abela has called on domestic banks to reduce their interest rates for lending facilities to Maltese businesses.

Addressing a meeting of the Malta Council for Economic and Social Development, Abela said that banks should take their cue from the interest rate cuts announced by the European Central Bank.

"All the sanction letters issued to businesses never have rates below 6%, when the interest on deposit is a miserable rate. It's unsurprising that Maltese banks declare so much profit," Abela said.

"I'm not saying banks should endanger their profitability, but it's not right that the monies they reap are based on low interest deposits and credit at higher rates, at the expense of businesses that are creating economic growth. Small businesses are competing for bank credit with larger development projects, because banks preferred to reap interest payments from these large projects, rather than businesses whose turnovers are lower."

Abela also called on the MFSA and the Central Bank to ensure that small business is served at decent rates of interest, and called on the Consumer and Competition Authority to see that dominant banks do not abuse their market position. "Public regulators should be making all the effort necessary to see banks' interest rates reduced. It's not enough to have Maltese enterprises invest and emplpoy people - banks have to play their part."