Micro Loan Guarantee Regulations, 2013

L.N. 101 of 2013

MALTA ENTERPRISE ACT

(CAP. 463)

Micro Loan Guarantee Regulations, 2013

IN exercise of the powers conferred upon him by article 5 of the

Malta Enterprise Act, the Minister of Finance, the Economy and

Investment, in consultation with the Malta Enterprise Corporation,

has made the following regulations:-

(1) The title of these regulations is the Micro Loan

Guarantee Regulations, 2013.

(2) These regulations shall be deemed to have come into force

on the 1st January, 2013.

In these regulations unless the context otherwise requires -

"assisted loan" means a loan granted by an authorised bank in

terms of this Act and the repayment of which loan is partially

guaranteed by the Corporation;

"authorised bank" means a commercial bank authorised by the

Corporation to issue assisted loans to support eligible projects

approved by the Corporation in terms of these regulations or the

Guidelines;

"Corporation" means the Malta Enterprise

Corporation

established under the Malta Enterprise Act;

"eligible enterprise" means an undertaking employing between

one to twenty persons (including the employer) whose annual

turnover does not exceed the sum of four million euro (€4,000,000),

and whose balance sheet total for the fiscal year preceding the date of

application shall not exceed two million euro (€2,000,000) or such

other number of persons, net value of plant, machinery or equipment,

or any other amount of annual turnover or balance sheet total as may

be prescribed in the Guidelines

Provided that the undertaking is not linked to any

undertaking operating in Malta that has already been assisted in terms

of these regulations;

"Guidelines" means such guidelines that may be published by

the Corporation from time to time in accordance with these

regulations;

"Minister" means the Minister responsible for industry;

"qualifying activity" means an economic activity consisting of a

trade or business that may contribute to the economic development of

Malta

Provided that an undertaking shall not qualify for the

assistance provided by these regulations if such undertaking operates

any of the following sectors

(a)

fisheries or agriculture;

(b)

primary production of agriculture products;

(c)

financial and insurance activities;

(d)

gambling including online gambling; and

"undertaking" means any self-employed person or any

commercial partnership constituted under the Companies Act, or any Cap. 386.

co-operative society duly registered as such under the Co-operative Cap. 442.

Societies Act.

(1) An eligible enterprise carrying on or carrying out, or Qualifying

intending to carry on or carry out in Malta a qualifying activity, which small

enterprises.

fails to obtain a conventional loan from an authorised bank, may be

considered by the Corporation to be eligible for an assisted loan in

terms of these regulations.

(2) An application for an assisted loan shall only be

considered by the Corporation and may only be approved by an

authorised bank if it is intended exclusively for the acquisition of

tangible assets and working capital linked to such acquisitions.

Assisted loans under these regulations may not exceed the Maximum limit

maximum limit of one hundred thousand euro (€100,000) or such of

loans.

other maximum limit as may be prescribed in the Guidelines.

The term of any assisted loan shall be for a maximum Term of the

period of ten years and six months from the date of the grant of the guarantee.

respective loan.

(1) The Corporation’s guarantee exposure regarding an Extent of the

assisted loan shall not exceed at any moment in time eighty per guarantee.

centum of the total outstanding loan balance due to the authorised

bank which shall not exceed the sum of eighty thousand euro

(€80,000).

(2) The Corporation’s guarantee of the repayment of an

assisted loan shall be subsidiary to the principal liability of the

eligible enterprise to whom an assisted loan has been granted.

An eligible enterprise to which an assisted loan is granted

by an authorised bank, shall pay the Corporation a premium of up to

2% per annum as may be specified in the Guidelines issued by the

Corporation

Provided that notwithstanding the authorised bank’s right

to charge an interest rate below the market rate or to grant a

moratorium period for the repayment of capital or interest, the

payment of the annual premium of 2% shall in any case be due to the

Corporation

Provided further that no moratorium granted by an

authorised bank may increase the term of the loan beyond a period of

ten years and six months.

An eligible enterprise qualifying for an assisted loan shall -

(a)

furnish to the Corporation and the authorised bank

such information and other documents which the Corporation or

the authorised bank may deem to be necessary for the purpose

of these regulations;

(b) provide the Corporation and the authorised bank

with reasonable access to all premises, places, books and other

documents, and allow copies to be made for the purposes of

these regulations.

(1) Notwithstanding anything contained in the

foregoing provisions of these regulations, the Corporation shall have

the right to declare not eligible any application under these

regulations.

(2) Notwithstanding anything contained in the foregoing

provisions of these regulations, authorised banks shall have the right

to refuse any application under these regulations even if declared

eligible by the Corporation.

€0.36