Implement a six-month automatic loan moratorium for all borrowers, says SME Association of Malaysia

KUALA LUMPUR (June 10): A six-month automatic loan moratorium that is interest-free and without any condition should be extended to all borrowers, according to the SME Association of Malaysia.

In a statement today, the association's president Datuk Michael Kang said that with the full-scale Movement Control Order in place, at least 40% of small and medium enterprises (SMEs) are expected to close. He also augured that many workers will see job loss in the next few months, especially in June and July.

"SMEs are in need of help immediately and this automatic moratorium is highly required to ease their cash flow," he said.

Kang added that there is an urgent need for the government to look into the matter, and he believes that with the State of Emergency in place, there should not be an issue in implementing an automatic loan moratorium, even with objections from the banks.

He added that with the prolonged nature of the pandemic, most SMEs are struggling to make ends meet, with their resources slowly being exhausted, on top of concerns that they will not be able to meet obligations such as rent, employee salaries, utility bills, etc.

As such, he argued that for many businesses faced with such odds, closure is the only path available.

Kang also urged the government to speed up the national vaccination programme in order to revive the nation's economy, which will help businesses, the public and banks.

In the same vein, Kang also urged SMEs to adopt a serious attitude when it comes to dealing with Covid-19, by introducing measures such as work from home mandates to help curb the spread of the virus.

Banks are currently providing a targeted approach of financial assistance to customers who need it. According to the Association of Banks in Malaysia, data showed that as at March 26, 2021, financial institutions had received 1.6 million applications for such assistance, with an approval rate of 95%.

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