Malta Development Bank appointed implementing body of the Interest Rate Subsidy scheme 

21st April 2020

Scheme complements the MDB COVID-19 Guarantee Scheme (CGS) 


Following the launching earlier this month of the MDB COVID-19 Guarantee Scheme (CGS), the Government on 16 April 2020 has announced a complementary Interest Rate Subsidy scheme as an additional measure to further soften the terms of working capital loans extended by banks under the CGS to businesses experiencing acute liquidity shortages due to the COVID-19 outbreak.

In a communication to businesses, the Malta Development Bank (MDB) announced that it has been appointed by Government as the entity responsible for the implementation of the Interest Rate Subsidy scheme. This will enable a more streamlined approach with MDB as the one-stop shop for the management of the CGS and the interest rate subsidies on loans covered by the CGS.

Through the Interest Rate Subsidy Scheme, businesses will be benefitting from a subsidy of up to 2.5% on the interest rate charged by banks during the first two years of working capital loans guaranteed by the CGS. This interest rate subsidy will reinforce the benefits that businesses will be experiencing through the Government guarantee fund of €350 million under the CGS, which include enhanced access to finance, longer repayment terms, a moratorium on both capital and interest and lower interest rates.

Preparations are now underway for the MDB to put into place the operational modalities of the interest rate subsidy scheme in collaboration with the commercial banks. In the meantime, the MDB is going ahead with the accreditation process for commercial banks to be admitted for participation in the CGS. The list of accredited commercial banks can be viewed on the MDB website.

The MDB will be providing more information on the CGS and on the Interest Rate Subsidy Scheme in a Frequently Asked Questions section that will be published in the MDB website soon.

For Further information the Malta Development Bank encourages businesses to send an email on info-covid19@mdb.org.mt


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