Traders in Kuala Lumpur at the end of the first day of MCO 3.0 on May 25, 2021. ― Picture by Hari Anggara
KUALA LUMPUR, June 10 — Upwards to 40 per cent of small-and-medium enterprises (SME) in Malaysia face the risk of shutting down if an automatic moratorium on bank loans is not forthcoming, warned a business association.
SME Association of Malaysia national president Datuk Michael Kang said the moratorium ought to also be interest-free without any condition and extended to six months for all borrowers with immediate effect.
“The MCO 3.0 total lockdown may result in at least 40 per cent of SMEs shutting down their
businesses, and many many workers will lose their jobs in coming months and
especially in June and July,” he said in a statement.
Kang said the automatic moratorium is an immediate form of help which will assist SMEs to ease their cash flow.
“The government must look into this as soon as possible. I believe with the Emergency Ordinance, there is no issue them carrying out the moratorium despite the Finance Ministry’s indication, and over the objections from the banks,” he said.
On Saturday, Finance Minister Datuk Seri Tengku Zafrul Aziz said it was unwise to provide a blanket moratorium since fighting the Covid-19 pandemic is more of a marathon than a sprint, likening the blanket moratorium to using a sledgehammer to crack a nut.
Kang cited as an example the recent closure of a decades-old restaurant in Kuala Lumpur, after it had struggled to survive following the Covid-19 outbreak.
“This is just the tip of an iceberg that many others will expect to follow suit. With the prolonged pandemic, most SMEs are struggling to make ends meet, their resources slowly being exhausted, and the worries about not being able to cope with rent, employee salaries, utility bills, among others.
“They have no other choice but to take this path to terminate their businesses,” he said.
To this, Kang urged Putrajaya to speed up the national vaccination programme to quickly revive Malaysia’s economy to help businesses, people and banks.
“SMEs must adopt a serious attitude when it comes to fighting Covid-19, by allowing their workers to work from home as much as possible to help curb the spraying of the virus.
“For all Malaysians, staying at home and strictly following the SOPs are the keys to winning this war,” he said.