GRTU head calls for lower bank interest rates on lending

Maltese banks should lower their interest rates on lending so as to encourage more small businesses to take loans, according to the General Retailers and Traders' Union CEO.

"The lending interest rates offered by Maltese banks is around 5% higher than those offered by the European Central Bank, and is much higher than the interest rates offered on savings," Abigail Psaila Mamo said.

"Our banks must encourage lending."

Earlier, finance minister Edward Scicluna had said that he had commissioned two reports on bank interest rates and bank charges, which will soon be made available to the pub.

They were speaking at a seminar on local micro-businesses at the Mediterranean Conference Centre organised by Labour MEP Miriam Dalli.

European internal market commissioner Elzbieta Bienkowski hailed Malta for being the first EU country to entrench the EU Small Business Act into national law.

"Malta was one of only five EU states whose SME sector expanded during the 2008 financial crisis," she said. "Moreover, SME jobs increased by 6% in 2014, one of the highest rates in the EU. The EU is now turning Malta for inspiration."

However, the local speakers struck a more sombre tone, with Scicluna dubbing a recent World Bank report citing Malta as the hardest EU country in which to set up a business as "embarassing".

He pledged to tackle bureaucracy, which is "entrenched in the Maltese system, but kills entrepreneurship".

He also highlighted the role of European investment banks in acting as a backstop to banks, who have been averse in handing out risky loans to start-ups since the financial crisis.

Psaila Mamo warned that local businesses have hardly started tapping into the EU internal market, and that they must be "hand-held" into doing so.

She also critcisied the bureaucracy involved in public procurement, and noted that several local businesses still don't have an Internet presence.

Meanwhile, Malta Employers Association director Joseph Farrugia said that potential laws should first a SME test, and that the government should be more pro-active in promoting the access to research and finance for microbusinesses.

He also called for entrepreneurship to be integrated into the education system, citing an MEA survey in which 95% of employers rated such an introduction as 'very useful'.