FSMA+ builds on the
success of its predecessor, the FSMA scheme, through which by end September 2021 around 250 students have benefitted from over €8 million in soft loans to undertake
specialised studies in various disciplines.
Thanks to the European Social Fund
(ESF) and European Social Fund Plus (ESF+), the Managing Authority (MA) allocated €5 million to
support the FSMA+ scheme. The MDB has been entrusted by the MA to implement the FSMA+.
The FSMA is a blended
financial instrument, combining two components: a grant element in the form of
an interest rate subsidy that makes the instrument more appealing for aspiring
students, and a guarantee that enhances student access to bank financing by
absorbing a substantial part of the risks.
Close to half of this
amount will be in the form of a grant subsidising the interest payments during
the moratorium period. The MDB will again provide a First Loss Guarantee
covering 80% of individual loans, capped at 25% of the commercial bank's
portfolio, generating a multiplier of 5, meaning that a total portfolio of
circa €15 million will be made available.
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Terms & Conditions
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Product Outline
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FSMA+
is targeted towards students aiming at furthering their educational
attainment. The scheme is financed under the ESF and ESF+.
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Objective
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FSMA+ seeks to support students in pursuing higher level of
studies at internationally recognised institutions by facilitating access to
more affordable financing. FSMA+ will be made available to students through
MDB's intermediating partner/s which shall be announced following the
finalisation of the selection process.
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Structure
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The MDB provides a First Loss Guarantee covering 80% of all individual
loans under the scheme which is capped at 25% of the commercial
bank’s portfolio earmarked for such loans, generating a multiplier of
5. Thus, a fund of €3 million stimulates up to €15 million of new
eligible loans.
The financial instrument is divided into two elements: (i)
Guarantee element: portfolio capped financial guarantee providing credit risk
coverage on a loan by loan basis for a portfolio of newly originated eligible
loans; and (ii) Interest rate subsidy element: the interest rate subsidy will
be utilised to cover all the interest incurred during the moratorium period
plus one year of each Eligible Loan.
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Banking Facility
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The maximum size of eligible loans guaranteed under the
facility is €100,000, with a maximum loan term of up to 15 years, including the
moratorium period. No minimum loan size is applicable.
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Loan eligibility
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The loan should be tied to students pursuing a study programme
which is an accredited course in MQF levels 5, 6, 7 and 8, as well as
internationally recognised certificates. The loans are available for full
time and part time studies. The loan will finance tuition fees, living
expenses, accommodation fees, transport expenses, textbooks and related
expenses.
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Eligible applicants
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The applicant has to be a Maltese citizen; or national of an
EU/EEA Member State provided that such person has obtained permanent
residence in Malta or is in Malta exercising his/her EU Treaty rights as an
employee, self-employed person or person retaining such status. The applicant
can also be a third country national who has been granted long-term
residence status in Malta.
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Benefits
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A maximum term of capital moratorium that covers the term of the
course plus an additional twelve months, subject to a maximum moratorium
period of five years. No interest during the moratorium period. The interest due during the moratorium
period is fully covered by an interest rate subsidy, placing no payment
obligation on the student during this period of low or no income.
Attractive interest rate, no collateral or upfront contribution
shall be requested by the partnering financial intermediary.
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Application process
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The scheme is available through MDB’s partnering financial
intermediary – Bank of Valletta
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FSMA+ Financial Instrument Application Details
Commercial
banks licensed to operate under the Banking Act, Chapter 371 of the Laws of
Malta are invited to submit a proposal as financial intermediaries of the FSMA+
scheme.
All relevant details and documentation can be found below: