The implementation of the JEREMIE initiative in Malta

Abstract

The European Commission together with the European Investment Fund have developed the Joint European Resources for Micro to Medium Enterprises initiative - referred to as JEREMIE - in order to encourage the adoption of Innovative Financial Instruments (INFIs). Such instruments have the capacity to improve financial access to SMEs through Structural Funds. INFIs have to be managed by a regional or national Managing Authority, which in the case of Malta after a tendering process, is Bank of Valletta plc. (BOV). Therefore, BOV serves as the financial intermediary for JEREMIE. This dissertation analyses the implementation of the JEREMIE scheme in Malta and the financial constraints faced by SMEs. Research focuses on the benefits gained through the JEREMIE scheme by SMEs and studies how its implementation addresses the financing gap and how this was overcome. Issues of collateral and security are also discussed. We learn that the characteristic the financial intermediary looks most at when a firm applies for JEREMIE is the financial viability of the project. Results show that there are other financial tools that firms could resort to, to access finance during different phases of their business life cycle namely, business angels, equity and seed finance. Results for thematic and geographic sectors that benefited most from the JEREMIE scheme are also presented. The main source of data collection for this study is the implementation of structured interviews. For successful data gathering this study adopts two main research tools including elite interviews and analysis of recorded conference videos. Authorities have been selected due to their expertise within the selected case study. Studies on the implementation of the JEREMIE initiative in the Maltese islands are rare. This dissertation departs from current evidence found in recent reports on the scheme in that it can be viewed as a detailed manual for those who have an interest in understanding the implementation of INFIs in Malta through JEREMIE in a broader academic and EU funding context.