The
financial instrument is financed under the Operational Programme II – Investing
in human capital to create more opportunities and promote the wellbeing of
society – 2014 – 2020.
Background
The
FSMA Financial Instrument (FI) was established to support the development of
human capital and aims at meeting the financing needs of students seeking to
pursue a study programme for accredited courses in MQF levels 5, 6, 7 and 8, as
well as other internationally-recognised certificates. Under this instrument, eligible
students will be entitled to receive financial support, in the form of repayable
assistance, for activities related to tuition fees, accommodation costs, subsistence
expenses and other expenses to further their studies in Malta and abroad.
The need for an FI was established following
an ex-ante study which confirmed the existence of a market failure with respect
to access to finance for students in Malta. In fact, a dedicated study has shown
that:
a)
the
current non-repayable grants, although on the increase, are still not meeting
the current and estimated demand, resulting in several applicants not receiving
the grants to continue to study;
b)
alternative
forms of assistance, through private sources, are insufficient;
c)
there
are a number of potential students who are not furthering their studies or
requesting further funding because current available financial products are not
sufficiently attractive;
d)
significant
progress is still required for Malta to reach the EU2020 educational targets.
Within this context, the FSMA will seek
to partially cover the investment gap resulting from this ongoing market
failure and support specific segments of the Maltese educational strategy by targeting
several cohorts at different MQF levels. Potential beneficiaries may be (i) applicants
for grants whose application was not accepted as demand exceeded the supply,
(ii) potential students who are not finding adequate financial support in the market,
(iii) those who are discouraged from studying due to financial reasons, (iv)
those who study in areas or levels which are currently not eligible for the assistance
they require and (v) those who cannot meet the requirements of any assistance
being offered to them.
Thus, the purpose of the FI is to support
eligible students by enhancing their access to bank loans. These will benefit
from zero interest payment during the moratorium period. The loan will be
covered with a guarantee offered through the financial instrument to a chosen financial
institution for a maximum term of 15 years covering the moratorium period of up
to a maximum of 5 years and the loan repayment period of up to a maximum of 10
years following the moratorium period. Eligible students will not be requested to
put upfront contribution.
The instrument is being implemented in
collaboration between the Managing Authority and the Malta Development Bank with
the Bank of Valletta selected to be the Financial Intermediary following an
open Call for Services.
Financial Information
Total Budget: €2,000,000 to generate a portfolio of
up to €5,500,000 in loans
EU Co-Financing
Rate: 80%
Managing
Authority
Planning and Priorities Coordination
Division (PPCD)
Office of the Prime Minister (OPM)
The Oaks Business Centre
Triq Farsons
Hamrun
Managing
Authority Website
Download
The approved and revised version of OPII, dated July 2018 - Investing in human capital to create more opportunities and promote the wellbeing of society may be found here.
The
executive summary of the Ex-Ante Assessment of Financial Instrument in
Operational Programme II 2014-2020 financed through ESF may be found here.