A coalition of Malay-Muslim NGOs is the latest to urge the federal government to direct financial institutions including lending and credit firms to offer a loan moratorium for B40 and M40 borrowers.
In a joint statement today involving 28 NGOs, the coalition, led by the Malay Chambers of Commerce Malaysia (MCCM), said an automatic loan moratorium would be a lifeline for groups that are affected by the current Covid-19 pandemic.
“The Malaysian cabinet is urged to direct lending parties such as banks, licensed lenders, credit firms, corporations and others to provide an unconditional automatic moratorium to the B40 and M40 groups for six months without any interest or additional profit including any shape of charges throughout the period," read the statement.
The coalition’s coordinator Ahmad Yazid Othman claimed that the aid given by the government so far was well below the national poverty line of RM2,208.
He said for many people who are burdened with loan debts during the Covid-19 pandemic, an automatic loan moratorium was a matter of “life or death” in continuing their daily lives and it will also discourage people from resorting to loan sharks and other illegal means.
“This automatic moratorium is needed by all the people as the government is unable to provide cash relief that is equivalent to the losses sustained by the people which can relieve their burden and (improve their) cash flow,” he said in the joint statement.
Earlier, Finance Minister Tengku Zafrul Aziz argued that the government did not have “any legal ability” to force banks to provide automatic loan moratoria to borrowers.
However, this drew criticism from a range of groups who claimed that banks have been making healthy profits despite the Covid-19 pandemic and should extend aid to the M40 category.