GEORGE TOWN: The Federation of Malaysian Manufacturers (FMM) has appealed to financial institutions to extend the moratorium on loan repayments by another six months.
FMM president Tan Sri Soh Thian Lai said this would give small and medium enterprises (SMEs) some breathing space to enable them to chart their recovery.
The loan moratorium was introduced in April to ensure businesses had the necessary cash flow to enable them to ride out the economic fallout caused by the Covid-19 pandemic and the movement control order put in place to curb the spread of the infection.
The pandemic had forced many businesses to stop operations briefly to enable workers to stay home to avoid infections. The losses incurred have forced many companies to lay off workers.
Soh said these are unforeseen challenges and for businesses to survive, they would need all the support from the public sector.
“An extension (of the moratorium) can ease the tight cash flow that we are currently experiencing,” he said.
He said an extended deferment of loan repayments could bring financial relief to companies struggling to sustain their operations, as well as economically disadvantaged individuals and workers who have been retrenched.
He said it could also enable SMEs to tap the initiatives introduced under the government’s Penjana recovery scheme.
Many businesses, especially those dealing in non-essential products and services, were only allowed to resume operations on June 10.
Soh said companies that offer products and services to the construction and hospitality sectors could take a bigger hit given that these two sectors have only just resumed operations.
As of July 6, 310,622 employers and 2.48 million workers have already benefited from the Wage Subsidy Programme, he added.
He said the high number of employers and workers who have to rely on the programme showed that businesses are still not able to sustain operations or ensure their employees do not lose their jobs without resorting to aid from the government.
Finance Minister Datuk Seri Tengku Zafrul Tengku Abdul Aziz had said earlier that individuals should liaise with their respective lenders to revise their loan packages.
