Since its establishment in 2018, the Malta Development Bank (MDB) has built a reputation as a catalyst for investment, bridging financing gaps where private markets fall short. In a recent video interview, Chairman Leo Brincat emphasised that his primary focus is on strengthening the Bank’s governance structures.
“Although a lot of emphasis is placed on ESG nowadays, I think people tend to focus more on the E and the S and a bit less on the G.”
The MDB differs from a commercial bank in that it was created under a specific Act of Parliament. This form of legislation governs the MDB’s purpose, functions, and limitations of action, some of which are embedded in the MDB’s governance. The MDB is governed through both the MDB Board and the Supervisory Board. The government jointly appoints the Supervisory Board with the opposition, and its role is to monitor the MDB to ensure it conducts its business within the framework of the Act. The MDB is subject to external review by the National Audit Office, Eurostat and the European Commission, as well as internal review through an ethics committee and a governance committee.
A bank designed for Malta’s development
MDB primarily works through accredited financial intermediaries; however, as CEO Alison Micallef explained, the Bank also engages directly with businesses. Having joined from the private banking sector, she highlighted the MDB’s unique and crucial role in Malta’s economy, a role that is often overlooked but is of immense importance.
“It’s a young bank. It’s been here for seven years. I find it very important for the country to have such a bank and to continue in this field, providing and bridging the investment gap, as our slogan says.”
By leveraging guarantees, co-lending schemes, and EU-backed facilities, MDB has supported hundreds of SMEs and larger firms. For instance, it has facilitated access to finance to small family-owned businesses, tech startups, and even established manufacturing companies, particularly during the pandemic when it channelled more than €500 million into working capital loans.
Driving ESG from compliance to culture
The integration of Environmental, Social, and Governance principles remains a central pillar. Micallef emphasised the importance of ESG assessments for large projects, noting that MDB utilises tools such as ESG calculators, which European partners, including the EIB and EIF, require.
At the institutional level, MDB itself underwent an extensive energy audit of its premises to ensure compliance with sustainability standards, underscoring a culture of leading by example. Brincat emphasised that governance is never a “dead letter,” but an evolving commitment to ensuring accountability and trust, a commitment that the bank takes very seriously.
Simplifying processes for greater reach
While MDB has successfully scaled its impact, Brincat candidly acknowledged that awareness remains a challenge.
“Our biggest challenge as a bank is to raise our visibility further… unless we simplify our methods, we could lose a lot of potential business.”
Simplification, he emphasised, is not a buzzword but a necessity. MDB aims to demystify its processes, enabling more businesses to access available support without being discouraged by perceived complexity.
Strategic priorities for innovation and Vision 2050
The Bank’s strategy, approved by its Board in 2023, sets out a clear roadmap aligned with Malta’s national objectives. MDB will continue to champion investment in creativity, research, and innovation, sectors where Malta has historically lagged.
Brincat revealed that MDB submitted comprehensive feedback to the Government’s Vision 2050 consultation, welcoming its long-term perspective beyond electoral cycles and underlining synergies with MDB’s focus.
“We believe in focusing on those areas which any government in Malta would be focusing on, creativity, innovation, and research, areas that hold the key to Malta’s future development and prosperity.”
MDB positions itself not as a substitute for government or private finance but as an enabler, catalysing projects, mobilising EU resources, and ensuring Malta’s development agenda keeps pace with broader European ambitions.
Looking ahead
Taking governance, sustainability and innovation as its guiding principles, the Malta Development Bank is defining its purpose as a trusted national promotional institution. The substance of its dual mandates – providing market solutions for SMEs while facilitating long-term strategic investments – maintains relevance in periods of crisis and growth.
“We ensure that we maximise the advantages of our size in the work we do and in the impact we generate.”
