Govt aid for SMEs: Can see, but cannot touch

 

A major part of Putrajaya's policies to keep businesses afloat during the prolonged pandemic has been a mix of loan repayment moratoriums, grants, loans, and wage subsidies.

Finance Minister Tengku Zafrul Abdul Aziz has repeatedly touted these measures as a major success. Yesterday, he said banks had approved RM12.12 billion in soft loans and RM1.215 billion in wage subsidies since the start of the pandemic.

However, several seasoned entrepreneurs, who are struggling to access these benefits, said reality is a lot worse than the rosy picture painted by Putrajaya.

The biggest problem faced by these entrepreneurs was that their loan applications were not only turned down by banks but were rejected verbally, leaving them with no proof to appeal their case.

A footwear retailer, who wants to be known as Lee, said all the banks she approached for loans facilitated by Bank Negara turned her down without anything in writing.

"They turn you down verbally, claiming that the documents you submitted were incomplete. This not only happened to me. Other entrepreneurs I know who are facing severe cash flow issues could not get any loan from the banks.

"We could not lodge a complaint with the central bank as there is no black and white to substantiate our claim since the banks turned down our application verbally," she lamented.

Lee owns several retail outlets in the Klang Valley and none could open during the current total lockdown.

Apply in writing, reject in silence

Samson Maman, who runs a digital printing business in Subang Jaya, also said the banks he approached for a loan since last year had turned him down for various reasons, or offered him a package that he could not afford.

"There was one time I asked for RM300,000 as stand-by cash. Instead, the back processed a maximum loan amount of RM700,000 and turned me down, on grounds that I cannot sustain a monthly repayment of RM8,000.

"Then I tried using my shop lot as collateral with a different bank. They said no because my business was a sole proprietorship and I am above 60.

"I offered to set up a private limited company but then they said they needed to see three years of company accounts," he said.

Samson said he has nothing to back his claim since the bank rejected his loan verbally.

'Automatic' moratorium fallacy

Apart from fresh loans, some business owners complained that even obtaining a loan moratorium was an arduous task.

Following the announcement of the Pemerkasa Plus stimulus plan, Lee said she tried to obtain either a three-month loan moratorium or a 50 percent reduction in her loan repayment plan.

According to Putrajaya and the Association of Banks, the B40 (bottom 40 percent income earners) group, those who lost their jobs, and those whose businesses were forced to shut, were supposed to qualify for "automatic" loan moratorium.

Prime Minister Muhyiddin Yassin mentioned "automatic moratorium" twice in his Pemerkasa Plus speech.

To Lee's surprise, the bank she approached demanded she prove her revenue was down 30 percent compared to the same period last year.

"How is it possible to prove that my business is worse now than last year? In May and June last year, we just got out of a two-month lockdown," said Lee.

Pan Malaysia Bus Operators Association president Mohd Asfar Ali said many in his sector do not rely on banks for credit facilities but on other creditors regulated by the Local Government and Housing Ministries, which are not covered by the bank loan repayment scheme.

The scheme that bus operators had access to came with a service charge of 0.5 percent per annum and the bus operators had to be in the black.

"That means we must not have incurred a loss but 99 percent of us are making losses due to the pandemic, so we're mostly not eligible," he said.

A businessperson in food processing, who wished to be known as Chan, said he struggled with the business digitalisation matching grant, with an amount of up to RM5,000.

Chan said he applied for the grant in July last year and there has been no response since.

"It was quite a hassle to apply for it. I know people who had to engage a consultant to do it for them," he said.

Chan said he was already cash-tight and has forked out a tidy sum to set up an online platform for his business to qualify for the grant only to be left in the cold.

The struggle to restart

Apart from struggling with accessing government benefits to survive the lockdown, some businesses are worried they will not even have money to restart their businesses once the economy reopens.

Asfar, whose association represents bus operators, said some members have sold off their assets recently since inter-state travel has been banned since January.

"Some of our members sold their houses and their wives' jewellery," he said.

"My company sold 10 buses last year. But this year, the value of our buses is like scrap metal. No one wants them."

He urged the government to help his sector with cash aid in order to restart their business when the time comes, as buses need to be serviced and repaired.

Similarly, Malaysian Chinese Tourism Association president Albert Tan and Malaysia Budget Hotel Association (MyBHA) secretary-general Denis Ong urged the government to allocate more assistance to their sector.

"We were allowed to apply for a loan of up to RM350,000. Some of our members have fully utilised it. To restart our business, we need help. Even another RM150,000 would help," said Tan. - Mkini