3-month extension of loan freeze for certain groups

Prime Minister Muhyiddin Yassin speaks on the moratorium on loan repayments implemented in April.

PUTRAJAYA: The moratorium on loan repayments will be extended another three months for certain groups, especially those who lost their jobs this year, Prime Minister Muhyiddin Yassin says.

After three months, the moratorium for those retrenched may be extended by the banks depending on the situation of each individual.

Monthly instalments meanwhile will be reduced for those who have had their salaries cut.

“For housing loans or personal ones, for example, the monthly instalments would be reduced at the same rate at which their salaries were cut.

“This will only be for six months although any extension will be based on an individual’s current salary,” he said in a televised address.

The six-month moratorium, which came into effect on April 1 to help the public and businesses endure the impact of the movement control order (MCO), ends on Sept 30.

Muhyiddin said the new initiative was expected to benefit three million individuals and SMEs, adding that those who were eligible could contact their respective banks to apply for the extension from Aug 7.

He said the banks had given their commitment to help those affected by the pandemic, including extending the loan period to reduce the monthly instalments.

As of July 20, he said, more than 7.7 million individual borrowers had benefited from the moratorium totalling RM38.3 billion, while some 243,000 small and medium enterprises (SMEs) had benefited from the scheme, amounting to RM20.7 billion.

However, he said, since the business sectors had started to reopen in phases beginning in May and during the recovery MCO, the economy had become more lively and individuals as well as businesses could afford to repay their loans.

He said the number of individuals who continued servicing their loans despite the moratorium increased to 601,000 from 331,000 in July, while the number of SMEs that did not utilise the moratorium increased to 13,000 from 5,000.

“However, I realise that there are economic sectors which are still facing difficulties and uncertainties. I understand that there are some businesses that have yet to fully operate and some lost their jobs and sources of income.

“I listened to the grouses and I know many were hoping the moratorium would be extended.

“Which is why the government has decided to extend the targeted moratorium and bank assistance to focus on those who really need it,” Muhyiddin said.

Finance Minister Tengku Zafrul Aziz had said the government would engage with banks on the possibility of an extension following calls from politicians, businesses and employer and employee groups for an extension of the loan freeze.