Over 400 businesses, civil groups urge govt for blanket moratorium on loans until year end, or until Malaysia achieves Covid-19 herd immunity

·3-min read
The groups held a virtual news conference to highlight their financial woes, and expressed concern that many of their members are in small businesses and micro enterprises that may not survive the year in the current economic climate without the zero-interest opt-in. ― Picture by Hari Anggara
The groups held a virtual news conference to highlight their financial woes, and expressed concern that many of their members are in small businesses and micro enterprises that may not survive the year in the current economic climate without the zero-interest opt-in. ― Picture by Hari Anggara

KUALA LUMPUR, June 11 — Struggling with debts in Malaysia’s prolonged pandemic crisis, over 400 groups representing businesses and civil society organisations banded together today to push for a blanket moratorium on loans.

The groups held a virtual news conference to highlight their financial woes, and expressed concern that many of their members are in small businesses and micro enterprises that may not survive the year in the current economic climate without the zero-interest opt-in.

“Our ask to the government is very clear — there must be a blanket zero interest opt-out moratorium made available until December 31, 2020 or when we reach herd immunity, whichever comes first,” the groups said as a collective.

The collective include Bumiputera Retailers Organisation Malaysia (BRO), Dewan Perniagaan Melayu Islam (DPMM), Federation of Malaysian Business Associations (FMBA), Gerakan Ekonomi Malaysia (GEM), Industries Unite, Majlis Tindakan Ekonomi Melayu (MTEM), Malaysian Association of Theme Parks and Family Attractions (MAATFA), Malaysia Associated Indian Chambers of Commerce and Industry (MAICCI), Malaysian Retailers Association (MRA), Malaysian Tourism Council (MTC), National Union of Bank Employees (NUBE), Movement of Monetory Justice Malaysia (MMJ), Persatuan Pengguna Islam Malaysia (PPIM) and SME Association of Malaysia (SME Malaysia).

They said they have collectively written to Prime Minister Tan Sri Muhyiddin Yassin acknowledging the proactive intervention of the Pemerkasa Plus stimulus package, but adds that the moratorium provided in the package would do little to alleviate the debt commitments of the people.

They asserted their belief that the banks could afford a blanket moratorium.

They also pointed out that the government had stepped in to rescue the country’s financial system in 2008, with an injection of RM70 million back then.

“The main beneficiaries were the banking system who were saddled with a high credit exposure and facing an imminent collapse. We feel the banking industry must take a moral stand and step up when the country is in a crisis.

“Eight top local banks also collectively made a profit of RM93 billion in the last three years. Using the same denominators — this new moratorium will likely ‘cost’ only RM6.4 billion which is only 7 per cent of the three-year annual profits for the top eight of the local banks or 20 per cent of their 2020 profits,” the groups said.

The groups added that they have also elaborated to the government, Ministry of Finance, and Bank Negara Malaysia on how their proposed blanket moratorium can be carried out for wider coverage than available currently.

They said these include socio-economic denominations, businesses, facilities, period, interest rate during moratorium, credit and leasing facilities, system and waiver.

“For example, in the Pemerkasa Plus package, mainly B40s are included. This should include all individuals who have banking facilities — including employers and employees from the public and private sectors. The same goes to the business parameter, it only covers micro-enterprises. This should include all Malaysian businesses,” they said.

“Not only those in B40, but also those in M40 and all business types — the small, mid-tier and larger entities. This will, in turn, allow all Malaysians in need and financial distress to navigate through a pandemic that has been coming in waves and we are yet to see the end of it,” said the group.

The B40 group refers to the country’s bottom 40 per cent of wage earners while M40 refers to the middle income level.

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