Muscat: Banks should not be 'glorified safety deposit boxes'

Prime Minister Joseph Muscat doubled down on his call for banks to facilitate funding for start-ups, warning that the public will judge them based on their willingness to stimulate the economy.

"I am disappointed with the level of engagement of banks in assisting start-ups. They shouldnt be glorified safety deposit boxes but should participate in the economy. People will not judge banks on their profits but on their ability to stimulate the economy," he said.

Muscat was addressing a launch at Castille of a seed investment scheme that will grant business angels tax credits for investing up to €750,000 in start-ups. The tax credits will be calculated as 35% of the business angel's total investment, capped at €250,000. The scheme will run until the end of 2018 or until total investments reach €5 million. 

Muscat hailed the scheme as an innovative one that will allow youths who want to start companies to access capital. However, he was adamant that such schemes should complement, and not substitute, the funding role played by banks.

"The government is sending out signals that it is willing to put its money where it mouth is and that it means business," Muscat said.