Venture Capital Malta addressing equity gap for SMEs – Chamber

The Malta Chamber welcomed the launch of a new scheme facilitating access to finance for SMEs, as well as of Venture Capital Malta.

The new initiatives build on the positive outcomes of previous schemes such as the Jeremie initiative, amounting to €15 million with a potential leverage effect of four times as much capital from which SMEs may benefit.

“The Chamber has always pronounced itself positively about initiatives of this kind. The previous Jeremie initiative administered by a local financial institution was a resounding success and was fully subscribed. This and other initiatives aimed at SMEs showed that there is clear demand for similar schemes from the business community,” the Chamber said.

SMEs have complained that alternative forms of finance such as venture capital and equity finance in remain virtually unknown in Malta.

The Chamber says an ‘equity gap’ exists in the provision of modest amounts of equity finance to SMEs, showing that equity-type financing goes almost unnoticed by both potential investors and smaller businesses seeking to explore their growth potential.

“There is also a clear gap in the market for alternative sources of financing which are more suitable to less traditional activities which are emerging in our economy as it continues to enhance its knowledge based and creative sectors,” the Chamber said.

“These two separate initiatives will offer alternative solutions that complement traditional bank loans and overdrafts. They seek to maximize the use of EU funded mechanisms and tap local and foreign equity based financing to continue improving the credit environment of our business community.”