Business coalition questions govt data on loan repayments, says four in 10 members already folded

·3-min read
Datuk David Gurupatham speaks during a press conference in Kuala Lumpur April 27, 2019. — Picture by Shafwan Zaidon
Datuk David Gurupatham speaks during a press conference in Kuala Lumpur April 27, 2019. — Picture by Shafwan Zaidon

KUALA LUMPUR, June 26 — A trade group coalition has called on Bank Negara Malaysia (BNM) to clarify how it obtained the data that showed 85 per cent of borrowers in Malaysia were able to resume loan payments after the blanket loan moratorium ended last September.

Industries Unite (IU) co-founder Datuk David Gurupatham said the figures were inconsistent with current numbers reported by some 112 trade organisations and 3.3 million businesses, which the coalition represents.

“Eighty per cent of our members can no longer sustain themselves and meet their financial obligations as and when they arise.

“Forty per cent have closed down and a further 20 per cent are likely to close over the next couple of months,” he said during a virtual press conference today.

On June 5, Finance Minister Datuk Seri Tengku Zafrul Aziz said that since 85 per cent of borrowers resumed loan repayments after the blanket moratorium ended last year, there was a strong indication that most Malaysians were able to continue paying their borrowings — meaning a blanket moratorium does not need to be reintroduced.

However, David said that businesses are “struggling to put food on the table” and will not survive until the end of the year if current Covid-19 business restrictions continue.

He stressed that in comparison banks still recorded profits last year despite giving out the blanket moratorium.

As such David reiterated calls for financial assistance to the business community, among which is an automatic moratorium for businesses and individuals on an opt out basis — as the current application based moratorium “defeats and delays” the objective of helping struggling businesses.

“The current targeted moratorium is subjective, it is up to the banks to accept or decline based on their subjective parameters and requirements.

“If this is to continue, there must be an independent ombudsman of sort answerable to BNM or MOF, to which appeals and complaints may be made,” he said.

David elaborated that the bank requirements to receive these targeted moratoriums are also unattainable by many.

“Audited results prove loss of income since last year is an issue, many did not even make a profit in 2020, many cannot afford to pay accounting companies for this service.

“Some because of travel restrictions, cannot have their directors or signatories present at the bank, some cannot access documents at the office because of travel restrictions,” he said.

Other than this, IU is also calling for businesses to be aided with a reduction in utility bills, as well as federal and state taxes and levies, along with a six-month deferment of statutory obligations such as EPF and Socso.

It is also seeking to have the current Wage Subsidy Programme to include more business categories, with the subsidy comprising of least 30 per cent of the employees’ nett salary; along with increased rental relief.

“Businesses have been told by the government to shut down or be restricted, yet businesses are expected and obligated to meet all their obligations with little assistance from the government,” he said.

A “total lockdown” under the third movement control order (MCO 3.0) was initiated on June 1, and required most businesses — except for those deemed “essential” by the government — to close their premises.

While being allowed to open, these essential businesses — such as restaurants and supermarkets — have to follow severe restrictions on their business activities.

Under the government’s National Recovery Plan, most businesses and economic sectors will only be allowed to reopen in the third phase of the plan, after daily new Covid-19 cases drop below the 2,000 mark and 40 per cent of the Malaysian population has received Covid-19 vaccination.

This government expects this to happen no sooner than September.

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