GEORGE TOWN: Malaysians should brace themselves for more job losses in the last quarter of the year if the moratorium on loan repayments is not extended by more than three months from September.
The Federation of Malaysian Manufacturers (FMM) estimated that at least 600 of the 900 small and medium enterprises (SME) in the state are already struggling to repay their loans because of the adverse economic impact of the pandemic.
FMM northern chapter chairman Datuk Ooi Eng Hock said business activities only resumed last month, so it would take some time before SME get back on their feet again.
“We hope to see a blanket extension of the moratorium on loan repayments so that SME can meet their lenders to restructure their loan packages to get some breathing space,” he said yesterday.
Individuals struggling to repay their loans could also have their banks reassess their positions, Ooi said, adding that the three-month extension already announced would cover only workers who have lost their jobs and those in other targeted groups who need attention.
The government announced last week that a more focused moratorium on loan repayments would be implemented for three months as soon as the current one expires in September. However, it would focus only on those “who are in need”.
Ooi said a blanket extension would allow everyone to assess their status without worrying about finding the necessary funds to service their loans at the same time when the exemption period ends.
“Flattening the curve of infection of Covid-19 as well as of the retrenchment rate are equally important in helping the economy to recover.”
Former Jelutong MP Jeff Ooi said that banks could do more to help aggrieved customers during this pandemic as they are more well-capitalised now than during the 1997 economic crisis.
“Our banks have been making encouraging profits so they can withstand the moratorium period if it is extended by another six months,” Ooi said.
“Furthermore, all interests are compounded, and although delayed, it will eventually still be paid to the banks. They will still make money ultimately. It is a better approach rather than allowing loans to turn into non-performing ones.”
