SMEs welcome loan moratorium extension, say banks can do more

Prime Minister Muhyiddin Yassin says the loan moratorium extension will benefit three million individuals and SMEs.

PETALING JAYA: Small and medium enterprises (SMEs) have welcomed the three-month extension of the loan moratorium but said banks can do more to help companies recover from the economic consequences of the Covid-19 pandemic.

Michael Kang, president of the SME Association of Malaysia, said most SMEs were not prepared for an end to the moratorium, originally scheduled on Sept 30.

He said the three-month extension, announced by Prime Minister Muhyiddin Yassin on Wednesday, will give the banks and SMEs more time to work together for faster economic recovery.

“What’s more important is that the banks should help support the SMEs. If some enterprises are facing difficulty repaying their loans, the banks could help to restructure the loans so the SMEs can pull through the pandemic. I think that’s more important,“ Kang told FMT.

He said if the banks could help with SME financing on top of the loan freeze extension, most of the businesses would be able to survive the crisis.

“Then they can keep their employees and help the economy to recover faster,” he said.

In a live telecast, Muhyiddin announced that the moratorium on loan repayments will be extended by three months for certain groups, especially those who lost their jobs this year.

After the 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.

Muhyiddin said the 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.