EIF and Banif Bank sign new guarantee agreement

September 23, 2016
June 20, 2023
EIF and Banif Bank sign new guarantee agreement

Photo caption: (From left) Joaquim F. Silva Pinto and Pier Luigi Gilibert signing the agreement.

The European Investment Fund, part of the European Investment Bank Group, and Banif Bank (Malta) have signed an agreement intended to support SMEs, in the presence of the Hon Deputy Prime Minister, Louis Grech and the Hon Parliamentary Secretary Dr Ian Borg. The guarantee agreement signed today will allow the Banif Bank to provide around €6 million of new loans to SMEs in Malta, until end 2019. This is one of the two SME Initiative transactions signed in Malta, which in total, will generate more than EUR 65 million of loans, supporting over 800 Maltese companies.

The agreement with Banif aims to facilitate access to finance for Maltese SMEs by enabling the Bank to lower the interest rates and reduce collateral requirements. This transaction is expected to benefit more than 60 SMEs and start-ups in need of finance.

SME Initiative Malta is a joint financial instrument of the European Commission, the EIB Group and the Government of Malta and aims to stimulate SME financing by providing partial risk cover for SME loan portfolios originated by financial entities. Alongside EU Structural and Investment Funds (ESIF) resources contributed by the Government of Malta, SME Initiative Malta is co-funded by the European Union through Horizon 2020 resources as well as EIB Group resources.  

Commenting on the transaction, EIB Vice-President, Dario Scannapieco said “I am pleased to be supporting this signature in Malta under the SME Initiative. In collaboration with Banif Bank, I am convinced that together we will be able to reach out to many Maltese SMEs in need of finance. This new agreement is the result of an excellent collaboration between the EIB Group, Maltese authorities, EC and the banks.”

EIF Chief Executive, Pier Luigi Gilibert added “I am delighted to be in Malta today to sign this guarantee agreement under the SME Initiative for Maltese businesses. Banif Bank is a new financial partner for EIF in Malta and we are pleased to be working with them to enhance access to finance for companies as a result of this agreement. The combination of European Structural and Investment Funds, EU Horizon 2020 and EIB Group resources enable EIF to support risk-sharing and provide capital relief to financial intermediaries for the benefit of SMEs.”

Joaquim F. Silva Pinto, Banif Bank Chief Executive Officer said “As an established core systemic bank Banif will continue to contribute significantly to the local economy, by offering credit facilities to business to support the different stages of their operations – from setting up to their development and growth. Our new agreement and collaboration with EIF means we are more than ever before in a strong position to offer entrepreneurs and businesses loans requiring minimal collateral and with advantageous rates. Our new product ‘Banif Business Accelerate’ will be doing just this. We would like to thank the Ministry for European Affairs and the Implementation of the Electoral Manifesto for this opportunity and for being an effective catalyst for nurturing the continual growth of Maltese businesses.”

Elena Grech, Head of the EC Representation in Malta noted: “The signature of a second loan guarantee agreement under the EU funded SME Initiative is very good news for Maltese enterprises and investors. They will now have the choice between two financial institutions, and can apply for more investment loans with the benefit of partial risk coverage provided for by the EU."

Hon. Louis Grech, Deputy Prime Minister and Minister for European Affairs and the Implementation of the Electoral Manifesto, said “In line with Government’s policy of promoting economic growth and wealth distribution, I am pleased to welcome Banif Bank as yet another key local financial institution through which the SME Initiative will be implemented in Malta for the benefit of Maltese SMEs. This initiative, which complements other existing facilities in Malta, is yet another building block that will continue to contribute to the growing impetus of economic progress that the Maltese economy is experiencing. It also provides a unique opportunity for European citizens to relate to the Union and demonstrates the benefits of EU membership.”

Continuing on the same lines, Dr Ian Borg, Parliamentary Secretary for EU Funds and 2017 Presidency, explained “Malta is drawing on positive experiences and improving upon other successful EU-funded instruments, and through the SME Initiative will provide easier and faster access to finance needed by SMEs to continue growing. Experience has shown that the business community has understood that financial instruments contribute towards improving business productivity while creating a spill over effect within the economy. Thus, the implementation of the SME Initiative through another Financial Intermediary, Banif Bank, augurs well to continue assisting SMEs through bank loans at a lower costs in order to enhance their operations and their investment capabilities.”

About EIF

The European Investment Fund (EIF) is part of the European Investment Bank Group. Its central mission is to support Europe's micro, small and medium-sized businesses (SMEs) by helping them to access finance. EIF designs and develops venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment.

About the EIB

The European Investment Bank (EIB) is the long-term lending institution of the European Union owned by its Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy goals.