Malaysia’s govt to discuss waiving interest on deferred loan repayment: PM

Tengku Zafrul said the government is in discussions with relevant stakeholders on improvement to the wage subsidy programme. — Bernama pic. Sketched by the Pan Pacific Agency.

KUALA LUMPUR, Sept 14, 2021, Malay Mail. Prime Minister Datuk Seri Ismail Sabri Yaakob told Parliament’s Lower House today that the government would consider calls to compel lenders to waive interest fees on deferred loan repayment under Putrajaya’s loan moratorium programme, Malay Mail reported.

The pledge is the first time the government has publicly stated that it would entertain such a call, which quickly gained traction as the recent round of lockdowns took a heavy toll on small and micro enterprises and jobs.

“I will discuss this with the minister of finance and God willing, we will try our best to help,” he replied to Pontian MP Datuk Seri Ahmad Maslan.

Bank Negara Malaysia (BNM) in August warned against forcing financial institutions to waive interest payments on loans that will accrue during the ongoing six-month moratorium, saying the move will cause “after-effects” for the country’s economic recovery from the Covid-19 pandemic in the long run.

Governor Datuk Nor Shamsiah Mohd Yunus explained that profits earned from accrued interest during the loan moratorium are meant to cover the funding costs of banks.

The loan repayment deferment programme had been widely welcomed but most borrowers, saddled by debt accrued from the chaos Covid-19 had wrought on livelihoods, want the government to compel banks to waive interest fees so they could have more disposable income.

Ismail Sabri was also asked how the government aims to address the drop in living quality among low income households.

The pandemic has again cast light on wealth inequality. Incidence of hardcore poverty rose last year while median income recorded a double digit decrease of 15.6 per cent, plunging a large chunk of “M40” households into the B40 group.

Ismail Sabri, in his reply to a question posed by Opposition Leader and PKR president Datuk Seri Anwar Ibrahim (Port Dickson), who queried if the government’s fiscal response to the pandemic to date is adequate, cited various federal programmes under several relief packages unveiled by the previous administration.

“That’s why we have several programmes that provide capital for businesses, such as those under MARA, by Bank Simpanan Nasional,” he said.

Ismail Sabri took office just last month amid a five digit surge in daily Covid-19 cases even as the government enforced strict curbs on several states that account for most of the country’s economic output, nearly paralysing businesses.

Nearly all states have moved to Phase Two of the National Recovery Plan as the government moved to reopen the economy. Some opposition lawmakers have criticised the move, citing the high daily infection rate and deaths now having reached over 20,000.

Ismail Sabri told Parliament’s Lower House today that the decision to reopen was based on science and data.

He said the economic sectors that are allowed to resume operations, such as retail and services, have recorded minimal incidence of infection.

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