Category: Articles

Covid has necessitated a significant level of close contact with enterprises to monitor the fluid and fluctuating conditions in order to be able to respond with adequate policy proposals.  

The SME Chamber’s latest study, carried out in November, on the state of business highlighted how almost 80% of businesses reported lower levels compared to 2019 with 55% reporting a decrease of over 30%. Another 10% reported staying in the same situation as the previous year and 11% reported an improvement. 

Amongst the sectors experiencing an improvement were those in household goods, finishings and electronics. The sectors that experienced a downturn were the majority, more prominently however Accommodation and Tourism Services, Catering and Restaurants, Clothing Accessories and Jewellery, Entertainment and Events, Weddings and the Leisure sector, Advertising and Marketing, Hair and Beauty, as well as Transport Services. 

Of concern was the feedback received by businesses where close to 40% did not foresee being able to survive for longer than 12 month, all things remaining equal. 37% also said that they were unable to answer this question. 

When asking businesses on whether they were foreseeing making any changes during the coming 6 months, 50% expressed that they had no plans. Other choices which scored highly were Selling and Marketing Online, Diversifying, Reduction in Employees and Downsizing. 9% said that they planned to invest more, as opposed to 7% that planned to close down. 

The results show clearly how heavily the uncertainty was weighing on businesses, 70% ranking it as their biggest concern at the moment. This was followed at 53% by very low turnover, the concern of government aid stopping at 33%, followed closely and by order of ranking, by not having an existent market, paying employees, rental costs, piling debt and increases in bank-related costs. 

When asked about the wage supplement, those benefitting and those not both carried out a degree of layoffs, with a high percentage, in both cases, however saying that they did not lay off anyone.  

In terms of aid necessary and investment priorities, businesses said that grants are a priority as opposed to tax credits or repayable loans. IT solutions, including eCommerce sites, automation software, digital marketing and subscription fees was another priority ranked highly by businesses.  

Apart from investing however businesses also outlined what other support they deem necessary by the government. These included: 

• Help with rental costs 
• Cost of banking facilities 
• Cost of shipping when selling online 
• Government to guide businesses with strategy 
• Relief from piling tax burdens and financial commitments 

The SME Chamber also asked businesses to share their experience in terms of how they mitigated the impact of Covid. At 35%, the majority did not do anything to mitigate. 29% of respondents however said that they came up with special promotions and offers to boost business, 20% started their delivery service, 18% migrated to online, 15% trained employees, 14% refurbished and another 14% diversified their operation. 

Human resources was one of the other big concerns of our members, mostly small and tight knit teams. We have therefore asked businesses to tell us about their struggles, apart from costs, were they experiencing. Highest ranking were the uncertain working environment and employees not feeling that their job is secure, issues with mental health, lack of social contact and low levels of morale. 

The festivities are the most important peak for businesses, the peak that makes up for other slower periods. This year the festivities are still expected to peak, yet the peak can only be called such when compared to the rest of the record slow year. 

Early figures are coherent with this assessment and though business is by far lower than last year, on average businesses appreciate the situation and therefore do not expect any better. There are however segments that are suffering more than others and sacrificing their businesses for the benefit of health and the rest of the economy, including snack bars, bars, entertainment establishments, events, performers and retail outlets selling occasion wear,  that are fairing much worse than others. 

The Malta Chamber of SMEs has taken up a number of initiatives to boost business in Malta. 

 

Black Friday Campaign 

The SME Chamber is a driver for Black Friday in order to ensure that Maltese businesses do their utmost on this day and feature prominently when consumers are looking for the best places to spend money at.  

This year’s Black Friday initiative sought to highlight all our members participating in the initiative, also including who is carrying offers online and who is delivering. This information was all included in our own ‘Guide to Black Friday’ that gave visibility to consumers to be able to plan their shopping ahead.  

 

Valletta 

From the feedback gathered and statistics, it became evident how Valletta was standing out in terms of the negative impact of Covid. In fact Valletta was turning into a silent city and businesses were on the verge of desperation.  

Through discussions with the Government and the support primarily of the Tourism Ministry and the Valletta Cultural Agency, a few meaningful initiatives were carried out to highlight Valletta as a place to visit for the festivities. 

 

Shop Local Campaign  

This is a campaign many members asked us to carry out to support them during this difficult time. This campaign was also suggested for the government to carry out at a national level in order to encourage consumers to support local businesses and save jobs by giving them priority during their spending.  

This campaign was launched at the beginning of December .

 

Wage Supplement 

Not all businesses could benefit from the initiatives highlighted above and therefore their survival did not depend on consumption but government support, while they remained closed or with close to no sales. 

The SME Chamber has therefore entered into discussions with the government in order continue ensuring that the Supplement helped those that needed it the most.  

The European Union’s medicines agency has moved forward a meeting to assess the Pfizer-BioNTech coronavirus vaccine for provisional approval to December 21.

The European Medicines Agency (EMA) is planning to issue its decision on the BioNTech and Pfizer vaccine on December 21, eight days earlier than planned.

The EU has come under increasing pressure to approve the vaccine, following emergency approvals from the UK and the US earlier this month.

Health Minister Chris Fearne told parliament on Tuesday that Malta was among the countries which had urged the EMA to move the approval process forward, without sacrificing any safeguards.

Malta has secured 500,000 jabs of the Pfizer vaccine.

Fearne said the European Commission is expected to approve the vaccine procurement within a couple of days of its approval by the EMA. Deliveries to several EU countries including Malta will then start within days.

“This means the first vaccinations in Malta could take place before the end of the year,” Fearne said.

Superintendent of Public Health Charmaine Gauci said the vaccine “could arrive a few days earlier than expected” but that it was too early to say.

A fortnight ago, BioNTech and Pfizer submitted an application to the EMA for a conditional marketing authorization for their COVID-19 vaccine.

The vaccine is currently considered one of the promising potential means of containing the Corona pandemic.

Covid vaccine not a ‘magic wand’

President of the EU Commission, Ursula von der Leyen tweeted that she welcomed the EMA’s decision to bring the meeting forward.

She added: “Likely that the first Europeans will be vaccinated before end 2020!”

Every day counts – we work at full speed to authorise #COVID19 vaccines that are safe & effective.
 
I welcome @EMA_News bringing forward its meeting to discuss the @pfizer/BioNTech vaccine, before Christmas.
 
Likely that the first Europeans will be vaccinated before end 2020!

— Ursula von der Leyen (@vonderleyen) December 15, 2020

Source: TimesofMalta.com; dw.com

Most of us will eagerly be turning the page on 2020 and looking forward to 2021. In fact, 2021 is expected to be better, not a difficult feat to achieve, with most of the aspirations hanging on the vaccine.

While we will all gladly swap any given year with 2020, 2021 is not presenting us with a clear trajectory.

2021 will see the slow return and gradual gearing up of the normal economy, something that will be consolidated between 2022/2023. 2021 will in fact still retain a number of unknowns – when will we be clear of the virus? How many tourists will Malta be attracting? What is the size of our economy?

What we want to avoid is going into 2021, such an important year for recovery, with an attitude of nonchalance, lowering our guard on preparation just because 2021 will be a better year than 2020.

 

In reality we must all work twice and even triple as hard to make 2021 a year of recovery. The reality is also that our contracted economy will not have space to accommodate the number of economic operators we had prior to Covid and certain sectors will take long to regain viability.

We must go into 2021 better prepared to turn the losses into profitability, in a much shorter timeframe. In a state of great fragility, following 2020, businesses do not afford wasting resources, they do not afford waiting around for clients that will not return in time to save their business.

Malta’s economy will have to restructure, and this is something we have been hearing for months about, yet the direction of restructuring is not known. This is something Malta must rectify in the immediate because we must shorten waiting time, we must redirect resources and funds from unsecure and questionable activity into the new lifelines.

Many businesses are at the moment evaluating their position and some are finding taking diversification decisions difficult since there is no clear guidance. Businesses know that due to Covid some doors will remain closed for now, but which doors Malta will seek to open, in terms of alternative economic pillars, is still unknown.

Such visibility and clarity is also essential from a banking perspective. Given the facilities made available thanks to the MDB, increasing the debt levels has so far been quite accessible, going into further debt however, either to sustain current business activities or to invest into re-structuring and diversification, will be a challenge.

Going into further debt is risky, yet investment and business redirection will be necessary for most businesses. SMEs should be supported through aggressive grants that will cover a significant part of the investments, not just any investments, but investments that will support Malta in its economic restructuring and redirectioning.

Economic recovery is a collective effort and responsibility. Our country does not afford stakeholders working independently, stakeholders must work together and in sync.

The Recovery Plan for Europe, the EU’s long-term budget, coupled with the NextGenerationEU initiative, will be the largest stimulus package ever financed through the EU budget. Malta needs to take the opportunities offered by greater flexibility in State Aid regulations to aggressively support businesses make the necessary investments, by which, they will be able to enter into the economic sectors that will re-ignite Malta’s economy, improve their business models into more sustainable ones and advance on the digital fronts.

Malta-based payments company enables merchants to accept the widely used international credit, debit and charge points via its Point of Sale terminals.  

Trust Payments Malta (trading as acquiring.com) today announces the addition of American Express to the growing list of payment types that can be accepted on the company’s card terminals in Malta.   

Other payment types accepted by Trust Payments include the ever-present Visa and Mastercard cards as well as emerging methods like Samsung Pay and Apple Pay which are already available on the Trust Payments terminals. Merchants can accept these payment types by chip and PIN, contactless mode, or by using smartphones or wearables.   

“We have worked relentlessly over the past months to support Maltese merchants as best we can to help them quickly adapt to accepting payments which do not require handling the customers’ cash or cards to reduce risk of infection. We have added new functionality such as contactless and pay by link, where a merchant would be able to send a link to their customer through social media or email to make a touch-free payment,” commented Steve Grech, CEO, Trust Payments Malta. “Now we want merchants to be ready for when the locals are visiting restaurants and retail shops more frequently once again and tourists start visiting Malta. As well as American Express, we recently added Dynamic Currency Conversion; this is where a customer who does not have a Euro card (for example, a pound sterling or dollar card) can select what currency they wish to pay in at the point of sale. Our goal is to help ensure our merchants adapt and our economy does not miss out on any source of income.”   

John Pace, Chief Business Development Officer added: “On average, consumers carrying an American Express card spend three times more than consumers who don’t, and their average transactions on those cards are 1.7 times higher, according to data provided by American Express. We want merchants in Malta, no matter their size, to be able to optimise the experience and increase loyalty for such customers by being able to accept their preferred payment method.”  

Trust Payments introduced their Point of Sale (POS) terminals onto the market in Malta just over a year ago and recently signed a partnership with the Malta Chamber of SMEs, aiming to increase competition on the local market, expand the range of payment options being offered and ultimately lead to reduced costs for shopkeepers and merchants to accept card payments.

To find out more about accepting Amex cards or DCC via the Trust Payments Point of Sale terminal, contact .

Following the first set of billboards in November, the Malta Chambers of SMEs has now launched its second set of billboards around Malta & Gozo, focusing on the importance to support local businesses.

This is part of a wider campaign supported by EU Funds, with testimonials by various members of the SME Chamber.

This campaign is an outreach effort that highlights the benefits of social dialogue and that being united with one voice benefits businesses directly.

Other testimonials will be published in the coming weeks on various mediums.

Mr Paul Abela, President of the Malta Chamber of SMEs participated during this General Assembly

Ursula von der Leyen, President of the European Commission addressed the SMEunited General Assembly

President von der Leyen in her keynote address highlighted that the crisis made it clear that society can count on SMEs, also in difficult times. Small and medium enterprises around Europe shifted their production towards protective equipment, disinfectants and ventilators in a very short time. Looking forward, she invited SME organisations to join forces for true recovery.

In their declaration, the SMEunited General Assembly calls on Member States and the European Parliament to approve without delay the Next Generation EU – with the Recovery and Resilience Facility – and to focus on solvency support for SMEs.

With 40% of European SMEs on the verge of insolvency, SME representatives urge EU Governments to take their responsibility. Moreover, authorities at all levels should align and cooperate with SME organisations for the design and implementation of Recovery and Resilience Plans.

“The outbreak of the coronavirus pandemic shifted the priorities to immediate crisis management and initiatives essential for the EU’s post-crisis recovery”, stated President Maggiar. “Now it is time to implement the initiatives for the recovery of Europe which can only be done with the involvement of SMEs”, he emphasised.

SMEs ask for better regulation to put the “Think Small First” principle into practice, that shall ensure their compliance with legislation in a cost efficient and easy manner. The Single Market should remain effective during the pandemic and be strengthened for the future.

To further drive digital transformation, safe and well-developed infrastructure, standards and connectivity are required. In addition, a level playing field, as well as an equal access to data must be ensured for SMEs to maintain their activity and develop new products, services and business models.

Finally, SME representatives reiterate their support for the Green Deal. They insist on a facilitating and unburdening policy to support SMEs towards a circular and carbon-neutral economy. Sustainable finance has to ensure access to funding for all SMEs. The supply of energy at affordable prices has to be guaranteed.

Source: SMEUnited.eu