Moratorium a much-needed support for individuals, biz

KUCHING: By allowing borrowers to not be obligated to make payments for their loans, a moratorium is considered a good measure to support those especially in the bottom 40 per cent (B40) groups as well as businesses not allowed to operate during the movement control order (MCO 3.0).

Under the PEMULIH recovery package, individuals, microenterprise borrowers as well as small and medium businesses (SME), will be able to apply for the six-month moratorium beginning July 7, 2021.

According to Bank Negara Malaysia (BNM), approval for a moratorium will be granted automatically and any other repayment arrangements will be made simple, with no requirement for borrowers to submit supporting documentation.

BNM said banks will also offer a reduction in instalments and other packages, including rescheduling and restructuring financing to suit the specific financial circumstances of borrowers.

Borrowers can opt-in online through a web form or an auto-generated email that will be available on banks websites to provide their personal and financing details.

Alternatively, borrowers may also phone their banks and guidance will be provided by the customer service officer.

Sarawak Housing and Real Estate Developers (Sheda) Kuching chairman Datuk Sim Kiang Chiok opined that many SMEs would be able to benefit from the loan moratorium programme as MCO 3.0 had impacted most of the business sectors.

“The government could also consider helping the middle 40 percent income (M40) group with this programme as this lockdown could be the last and most likely will extended,” he said.

Zooming into properties, Sim said the housing development industry would not want to see non-performing loans (NPL) for house purchases as well because this would affect the market price of houses when they are put for auction due to non-loan repayment.

To have automatic bank loan repayments moratorium for all including B40, M40, micro businesses and SMEs will help give time for the working society, businesses and industries to resume, recover and revitalised their business, with the economy on the growth path again.

As banks reported good profits last year and during the first quarter of this year, Sim remarked it showed that banks possessed the capability to further assist businesses by possibly extending the loan moratorium to early next year.

“It will be good for businesses as they can use all their turnovers to continue to run their business post pandemic without having to further borrow or tied down by the loan repayment.

“This will prevent NPLs and preserve the value of our assets as there will be little loan recall or auction of properties.”

Also, as all businesses have gone through 18 months of various level of lockdowns, Sim asked that Bank Negara allow banks to assist in recapitalising businesses and relax their lending rules, which were based on pre-Covid requirements that are difficult to meet now.

However, not all businesses can benefit from these packages. According to the Sarawak Association of Spa, Reflexology and Wellness Operators president Dr May Then, over 65 per cent of their spa and reflexology outlets had already closed down since the pandemic began last March.

Taking loans from banks are almost impossible because there will be no new income to make repayments and thus, many are forced to close down.

“For those surviving operators, we hope to resume business as soon as possible with all other touch industry after the vaccination programme is completed,” Then told The Borneo Post.

She said it was pertinent for State Disaster Management Committee (SDMC) to engage in a dialogue with the industry to formulate strategies and solutions for their exit plan.

“For example, if we are not allowed to operate, please work out rebates on our foreign worker levies, visa fees, trading licenses and many more. We are not spared by any other government departments on all the fees that are due. Where can we get the money to pay?”

Then said their industry should also be considered as essential service because they can provide services to stress-out frontlines and other members of the public, especially with suicide cases on the rise.

Within the fitness industry as well, home-grown fitness chain Level Up Fitness founder Kenny Sia said outdoor businesses allowed to operate during these movement restriction period were receiving similar financial assistance as those placed in the negative lists published by the federal, state and local governments.

“The Sarawak government must set aside funds to prevent catastrophic collapse of the state’s fitness industry, similar to how assistances were given to the tourism and e-hailing industries,” he said.