The Malta Development Bank: Bridging the Investment Gap

The new CEO of the Malta Development Bank, Alison Micallef, has certainly hit the ground running. Less than a month into her new role, the MDB has already increased the amount of subsidised loans available to students, and launched schemes focused on environmental sustainability, as well as the cultural and creative sector.

In her youth, Ms Micallef had worked for local banks at managerial levels, before moving to Vienna to study, and then staying overseas working in senior positions.  Once back in Malta, she joined MDB as deputy CEO in February 2025, taking over as CEO on July 4.

“I had the benefit of a few months hand-over from my predecessor Paul Azzopardi, which enabled me to get a feel for the bank and to get to know the team,” she said.

In spite of her 30 years’ experience, the MDB marks her first time in the public sector, bringing her into a remit which can really make a difference – but it is not without its challenges.

Although she has only recently joined the MDB, she is well aware that the economy has changed significantly since the bank's establishment in 2017, particularly in the aftermath of the Covid-19 pandemic. During the pandemic, the MDB played a catalytic role in supporting the business community by securing approximately €475 million in working capital loans. In the post-pandemic period, the MDB swiftly shifted its focus toward economic recovery, launching a range of investment schemes aimed at helping businesses rebuild and grow.

However, there are new challenges on the economic horizon, not the least of which is sustainability, particularly given the impact that environmentally sound finance can have.  

Its aim is to encourage less-polluting technology. For example, the MDB has seen important wins in the adoption of digital technology, such as e-Cabs, which received finance through Bank of Valletta and the MDB. The company is now selling its technology in Greece, the UK, Germany and Romania.

“They were able to sell the concept, the technology! This is the sort of digital innovation that we would like to see SMEs adopt,” she explained, stressing that there is funding that that can be tapped into.

She also explained that SMEs might want to delve into accessibility, an aspect that is now mandated by the law, and where there is considerable scope for investment.

Many companies use the phrase ESG, without really taking into account all the three pillars it represents: environmental, social and governance. The environmental pillar is one that concerns her as, for example, something as radical as decarbonisation might need to be done while a company continues with its everyday operations – not an easy thing to do.

“Sometimes, even with the most up-to-date technology it could be very difficult, but maybe we should not aim quite so high. Small things can also make a difference, such as becoming paperless, doing less manually and more digitally. The process landscape has to be analysed and broken down to see what can be improved.

“Unfortunately, people get stuck into doing things in a certain way even though the world around them has evolved. It seems that there is an appetite for innovation – but only in in specific areas,” she said.

There is also much that can be done in the cultural sector, which would encourage more people to either stay in this field – whose skills would otherwise be lost – or to join it.

“The country has deep roots and it is important to keep them alive,” she explained. “We need to educate our population – of all ages – to consider these important crafts and skills.”

For the creative arts, Ms Micallef sees many opportunities, especially for performing arts, from theatre to dance and film-making.

“It is all about people expressing themselves,” she said.

Another area of the MDB’s operation that has been very successful is the investment in studies, with the Further Studies More Affordable scheme available to subsidise post-secondary and tertiary studies in various spheres. The funds available, which are also part of the EU-funded project, had already been topped up twice – with the MDB already considering a fourth after the recent top up. Apart from providing the loan for the studies, there is subsidised interest, and beneficiaries only have to start repayments after completing their studies.

So far, it has already helped 750 students over the past six years, providing a total of €33 million, with demand outstripping the supply of funds – hence the top ups.

As with other development banks in the EU, the MDB partners with commercial banks – who provide the loans that it guarantees.

The MDB not only ensures that the projects fall within the commercial banks’ risk appetite but can also help to extend the repayment period beyond the banks’ normal restrictions. It can also work with more than one bank should large projects require more funding than a single bank could handle.

“That is where we can really make a difference as we can also help with the structuring of the lending, for example,” she said.

Ms Micallef and her team are determined to keep up the momentum and to expand even further.

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