Economist calls for special fund to help businesses hit by Covid-19

Senior economist Ramon Navaratnam says the government should provide help for parties badly affected by the Covid-19 outbreak. (Bernama pic)

GEORGE TOWN: A senior economist said a proposal to the government to delay debt repayments in view of the Covid-19 pandemic is a good idea to help small-time businesses and the poor.

Ramon Navaratnam said a moratorium on repayment of loans should be imposed on genuine cases, especially small and medium enterprises (SMEs) and those in the low-income group.

“Concessions such as moratoriums and lowering of interest rates have been done for big corporations before, so why not small businesses and low-income earners?

“I would encourage the government to provide help for businesses which have suffered and the B40 group, but it has to be given to those genuinely in need.

“In the shared prosperity vision, help must be given to SMEs based on their track record and potential. There have been precedents for this during a national slowdown, recessions and unusual economic developments,” he told FMT.

The Consumers Association of Penang (CAP) urged the government yesterday to allow delays in the repayment of debts, especially for those in the business sector, in the wake of the Covid-19 outbreak.

It said this would help SMEs affected by the impact of the virus on the supply chain, and tourism at large.

Navaratnam, a former finance ministry deputy secretary-general, said a special fund with money from the government and banks should be set up to help deserving parties hit by the crisis.

He said the funds can be held in trust by Bank Negara Malaysia, with the central bank laying out the mechanics of those asking for help.

BNM, he said, can entice more financial institutions to chip in by offering corporate tax reliefs.

He said any “good bank” would contribute and, in turn, save the economy from further slowdown.