Boardroom Brief | Alison Micallef Development Finance, Innovation and Investing in Malta’s Future

Since taking the helm of the Malta Development Bank in 2025, Alison Micallef has focused on expanding the institution’s role as a catalyst for investment, innovation and long-term economic resilience. In this edition of The Boardroom Brief, she discusses how development finance can bridge critical funding gaps, the MDB’s growing support for start-ups, students and strategic sectors, and the significance of its strongest financial performance to date. From unlocking capital for research-driven enterprises to supporting Malta’s Vision 2050 ambitions, Alison shares her perspective on the evolving role of development banking and the importance of ensuring that viable ideas, businesses and projects have access to the finance they need to grow.

Alison, you were appointed Chief Executive of the Malta Development Bank in 2025. What drew you to the role, and what have been your priorities since taking the helm?

What drew me to the role was the Malta Development Bank’s clear public purpose. MDB exists to intervene where viable investment is being held back by financing gaps, risk perceptions or longer-term uncertainty that the commercial market is not always well placed to address. I joined at an important stage in the Bank’s development, when its legal, operational and governance foundations were already established, and the focus could shift more decisively towards delivery and impact.

Since taking the helm, my priorities have been to strengthen the connection between strategy and execution, broaden the financial instruments available to businesses and individuals across the economy, and ensure that the Bank’s resources are directed towards areas that support Malta’s long-term resilience. We have continued to build institutional capability across risk management, governance, product design and internal systems, while also deepening engagement with commercial banks, European institutions, government entities and the private sector. Our 2026 to 2028 Business Plan provides a clear framework for supporting productivity, innovation, skills, energy resilience and competitiveness in line with Malta Vision 2050.

The MDB is currently working with Xjenza Malta to provide financing to innovative start-ups looking to commercialise their research and bring new ideas to market. Can you tell us more about why the collaboration came about and what it means for Malta's innovation economy?

The collaboration with Xjenza Malta, the national agency responsible for science and technology funding, reflects a very practical need. Innovative start-ups often face a financing gap at a critical point in their journey, namely when they are moving from research or prototype stage towards bringing a product or service to market. These businesses may have strong ideas and genuine commercial potential, but they do not always have the collateral, credit history or tangible assets that traditional bank lending typically requires.

Through the Go-To-Market Loan Assistance Programme, MDB works with local commercial banks to improve access to finance for start-ups already participating in Xjenza Malta programmes. MDB provides an 80% guarantee on loans issued by participating banks, meaning it covers 80% of any loss while the bank retains the remaining 20% risk. This reduces the risk for commercial banks and helps make them more willing to support early-stage businesses. Xjenza Malta complements this through grant support, including an interest rate subsidy, upfront contribution support and measures that help ease collateral requirements. For Malta’s innovation economy, this means more research-based ideas can move towards market readiness, commercial validation and sustainable growth. It is a practical example of how development finance can bridge the gap between research, entrepreneurship and private sector lending.

The MDB's latest Annual Report reveals a record profit in 2025, with €688 million in total financing facilitated since inception. What is behind that strong financial performance?

MDB is not driven by profit maximisation in the way a commercial bank is. Our role is to ensure that viable initiatives in underserved or unserved parts of the market can access the finance they need. That said, our 2025 performance reflects both growing activity and disciplined execution. Since inception, MDB has facilitated €688 million in cumulative financing across loans, guarantees and other instruments, including €130 million in direct loans for new investment and €27.6 million in new assistance during 2025 alone. These figures indicate that the Bank’s products are being used more widely by businesses, students and other borrowers across the economy.

Beyond the numbers, 2025 also brought important strategic progress. One key milestone was the successful completion of the InvestEU Pillar Assessment, a rigorous European Commission process that confirms whether an institution’s governance, risk management and operational standards meet the level required to work directly with EU-backed instruments. This positions MDB as a trusted partner for deploying European public funds and opens the door to new financing tools and risk-sharing arrangements. We also launched new schemes focused on sustainability and the cultural and creative sectors, while relaunching our education finance product. Taken together, these developments strengthen our ability to mobilise capital in support of Malta’s long-term economic priorities.

The MDB works with a wide range of businesses, from SMEs to students to cultural and creative enterprises. For someone who has never engaged with the Bank before, what is the most important thing to understand about what you offer?

The most important point is that MDB exists to unlock finance where viable projects face gaps that the commercial market does not adequately address. We are not a commercial bank and we do not compete with commercial banks. We work alongside them, using guarantees, co-lending and blended finance to help productive projects access funding on more appropriate terms.

A guarantee means MDB agrees to cover part of a loan if the borrower is unable to repay it, which gives commercial banks greater confidence to lend. Co-lending means MDB lends alongside a commercial bank, sharing the risk. Blended finance brings together public or development funding with private finance to support projects that may not work on purely commercial terms alone.

This support can make a meaningful difference where collateral requirements, loan size, repayment terms, perceived risk or project structure make financing harder to obtain. For small and medium-sized enterprises, MDB can improve access to credit and reduce pressure on collateral. For students, schemes such as StudentAssist support investment in education without requiring collateral, upfront contributions or parental guarantees. For cultural and creative enterprises, dedicated instruments make finance more accessible to businesses whose models may not fit traditional lending patterns.

MDB can also help mobilise finance for nationally important infrastructure. In the case of the Airfield Electrification Project at Malta International Airport, the Bank facilitated access to EU grant funding through the Alternative Fuels Infrastructure Facility. The project supports the shift from diesel-powered ground equipment to electric alternatives, helping to make airport operations cleaner and more sustainable.

Across all these areas, the principle is the same: MDB supports viable activity that contributes to growth, skills, sustainability, resilience and inclusion.

For businesses looking to invest or expand, what makes the financial environment here inviting?

Malta offers a supportive financial environment, underpinned by strong commercial banking relationships, access to European funding instruments and a national development bank whose role is to close financing gaps where they arise. In 2025, bank credit to non-financial corporations in Malta grew by 12.3%, while a survey by the European Investment Bank found that only 3.7% of firms in Malta reported being financially constrained, compared with an EU average of 6.1%.

For investors and businesses looking to expand, MDB adds an important layer to that environment. We help address constraints that may still exist, particularly around collateral requirements, loan size, longer repayment periods and risk-sharing for strategic investment. Through guarantees, direct lending and co-lending with commercial banks, we support viable businesses on more suitable terms.

This is particularly relevant for companies investing in sustainability, innovation, skills, infrastructure, energy resilience or higher value-added activity. What makes Malta’s financial environment attractive is the combination of private banking capacity, targeted development finance and access to European frameworks, all aligned with long-term national priorities.

Ultimately, MDB’s role is to help ensure that the right finance reaches the right investment at the right time, whether that means a business looking to grow, a student investing in future skills, or an innovative enterprise ready to scale.