There’s a pall of unusual despondency this August, traditionally a month to celebrate Merdeka. What would it take to lift this grim mood after 17 months of lockdowns imposed by the Perikatan Nasional-led government in its unsuccessful attempts to combat the Covid-19 pandemic?

A bit more money in circulation would help. The ministers for finance and transport can brighten the skies with a stroke or two of their mighty pens.

First, though, let’s explore the concept of “essential services”. After almost two years of the movement control order and disruption of economic activities, every business that’s still surviving should be allowed to reopen.

We have an open, market economy where we depend on buying supplies or services to continue operations, whether it’s the government printers buying security-grade paper and ink for printing road tax discs or selling your car to a second-hand dealer.

So let’s open up the economy entirely but adhere to the new normal by observing the 3Ws and 3Cs: Wear a mask; Wash or sanitise your hands; Watch your distance; No crowds; No closed doors; No close contacts.

As to the matter of money, the government has ordered financial institutions to give borrowers a six-month moratorium on car loans; a good initiative, but the finance minister, who seems to be sincere in trying to help the rakyat, must consider taking it a step further.

Financially-stressed borrowers will reckon that the moratorium is just a temporary respite: they have already lost their jobs and don’t have the cash flow to make the RM1,000 a month loan repayment.

Such a borrower would be much happier with a permanent closure to the loan.

The complication is the negative equity on his car.

Take a three-year-old vehicle with a value of RM35,000, on which the remaining bank loan is RM50,000.

The borrower finds a friend who will take the car off him and take over the loan instalment. This informal practice is called “sambung bayar”. If he can get the friend to compensate him with a motorcycle or a smaller, older car for the money he already paid for the car, that would take a load off his mind.

Anyone would be depressed if he had a loan which he had no way of repaying and which would grow bigger and uglier.

According to an auto dealer who used to work in a financial institution in the mid-1990s, this “sambung bayar” phenomenon was dealt with by a variation of the hire purchase contract with the agreement of the banks. It could be a new agreement or a variation of the agreement.

The challenge was that variations of the original HP agreements gave the financial institutions more work and scant additional profits.

That extra work to upgrade the “sambung bayar” is important so that the original borrower is freed from any further encumbrances and doesn’t have to guarantee the loan repayments by the new hirer. The original buyer is already taking a big hit when he sells the car, but at least he can breathe easier and look for work on a motorcycle or a lower-cost car.

The challenge for finance minister Tengku Zafrul Aziz is to get the financial institutions to help financially-distressed Malaysians and residents beyond a mere moratorium. Most of the banks are reporting healthy earnings and this is the time they should contribute to the national recovery by going the extra mile.

The opening of the entire value chain of the automotive sector couldn’t come any sooner.

Second-hand car dealers and credit companies are essential intermediaries to the survival of small businesses, says Tony Khor, president of the Federation of Motor and Credit Companies Association of Malaysia.

“Many people in small and micro businesses are running out of savings and they will consider selling their cars so that they have the cash to roll, survive and fight another day.

“But how can they sell their cars or trucks if the automotive sector including showrooms are not allowed to open,” he said after a virtual meeting with transport minister Wee Ka Siong.

“Car dealers themselves are already suffering. If MCO 3.0 continues for another three months, 30% of our dealers will close down.

“With the automotive sector accounting for RM57 billion annual revenue and 6.8 million cars under finance as reported by CCRIS, and 100,000 units of used cars in stock, there’s no time to lose in reopening the automotive sector.

“In our business in this pandemic, there are few window shoppers. In fact, we hardly have 10 potential customers a day. We are already observing the 3Ws and 3Cs,” he said.

The views expressed are those of the writer and do not necessarily reflect those of FMT.