Malaysia’s govt urged to extend moratorium on bank loan repayments to December

KUALA LUMPUR, Jun 19, 2020, NST. The government has been urged to consider extending the six-month moratorium on bank loan repayments to December to ease financial burdens of the public, New Straits Times reported.

Concerned parties said this was a much-needed move because the public, especially small businesses, would have difficulties recovering from the loss of income and jobs amid the Covid-19 pandemic.

Gerakan president Datuk Dr Dominic Lau Hoe Chai said the government has to factor in the country’s unemployment rate which is expected to increase from 3.5 per cent to 5.5 per cent this year.

Besides benefitting the public, the extension could also tackle the social issues among the community, he said.

“Although the banking industry will suffer added losses if the moratorium is extended, Gerakan believes the government can come up with the best solution to prevent the financial deficit.

“This moratorium period can provide financial relief to those who are economically disadvantaged, especially those who have been laid off and lost their source of income,” he said in a statement today.

He added to ensure country’s goal of recovering the economy is achieved, the moratorium should be extended to allow small and medium enterprises (SMEs), young entrepreneurs and youths to seek the best possible government aid to stimulate the economy.

Meanwhile, UiTM Alumni Association’s business affairs chairman, Ahmad Muzakkir Hamid said the moratorium should be extended for another six months.

He said the current moratorium period will expire in October but the government should take into consideration the many business sectors affected since the economic sector re-opened on June 10.

“To date, the number of registered SME entrepreneurs in Malaysia is 907,065, out of which over 600,000 are micro SMEs, and approximately 10 per cent were entrepreneurs comprising of UiTM alumni.

“It is certain that this group of micro SMEs will face some financial difficulties. We also found that of the total number, 8.85 per cent of businesses have shut down.

“Pasar malam (night markets) and pasar tani (farmers’ markets) have been allowed to operate since June 15. But with the strict SOPs, some traders have decided to delay reopening as they are in the midst of calling for a review of the SOPs.”

Ahmad Muzakkir said it is also expected that businesses will not be able to recover losses or do as well as before the Movement Control Order took effect.

“This is because we expect a decline in purchasing power as people spend prudently to save more money. Therefore if this moratorium ends in October, it will be a burden to this group,” he added.