Bank Negara tells SMEs to re-engage with banks to handle economic situation

Since January, BNM has reduced the overnight policy rates by a cumulative amount of 125 basis points to 1.75%, the lowest in 16 years.

KUALA LUMPUR: Small and medium enterprises (SMEs) that require financial restructuring to support their business activities while recovering from the Covid-19 pandemic can now re-engage with their banks, Bank Negara Malaysia (BNM) governor Nor Shamsiah Mohd Yunus said.

She said the banks could assist in terms of reducing the interest rate, extending the moratorium or allowing the application of new loans for businesses.

Since January this year, BNM has reduced the overnight policy rates by a cumulative amount of 125 basis points to 1.75%, the lowest in 16 years.

More than 90% of borrowers took advantage of the moratorium which came into effect on April 1. The amount involved was RM66.6 billion as of July 31.

Out of the total, RM23.3 billion was utilised by the business sector while RM43.3 billion was used by the public.

Though the moratorium ends on Sept 30, 2020, banking institutions are expected to provide other means of assistance.

For the second quarter alone, banks have provided financial support to businesses at a lower rate, having disbursed about RM181 billion, of which RM56 billion is for the SMEs.

“The banks have been supporting their customers for a long time and they know the strength of the customers. They can also customise the financial product that will be more suitable for the customers to remain viable,” she said on Thursday, adding that the SMEs should get in contact with their banks.

She also said the pandemic had benefitted the healthcare sector through their production of personal protective equipment which boosted their business.

In a live stream today, the governor said from Sept 1, the central bank’s Credit Counseling and Debt Management Agency would offer specialised solutions to help SMEs manage their debt and promote sound financial management practices.