Muhyiddin moots another round of loan repayment moratorium

 

The National Recovery Council (MPN) recommended that banks should consider offering moratoriums to small and medium enterprises (SMEs), especially those that are still struggling to recover after Covid-19.

Its chairperson Muhyiddin Yassin said there have been three MPN meetings to discuss about SMEs, which among others, have asked for financial assistance as some of them are still unable to recover and business was declining.

This is coupled with the increase of the overnight policy rate (OPR) three times this year, which is seen to not only affect the momentum of the country’s economic recovery but also the performance of SMEs, which now contribute to 90 percent of the country’s economic activity, Muhyiddin added.

“In the last (MPN) meeting, they (SMEs) requested that the banking institutions review (whether) it is possible to hold another special moratorium. (I think) even with the moratorium, they (banks) will not lose much. For a little while, they (SMEs) want to recover but cannot recover anymore (now).

“(If SMEs) want to borrow money, the bank (will) say first that they have not paid (the loan). Now, the OPR has gone up, (if) they want to borrow again, (the bank will) ask for a track record of the past year or two (but) after a year or two, they will show a loss.

“If you want to base it on normal conditions, (they) will not recover,” he told reporters after the Jualan Prihatin Rakyat in Bukit Pasir today.

Muhyiddin, who is also a former prime minister, hoped that the government will look into SME’s plight, seen as one of the main sectors that contribute to the national economy.

“Yes. It (OPR increase) will have an impact. Even now, we (MPN) are paying attention. Among other things is the issue of poverty and economic recovery, especially for SMEs.

“If they (SMEs) are not active in producing marketable production, which can be competitive, it means that the recovery will be affected. (Recovery) is getting slower with the burden of costs, increase in inflation rate and so on, this will be a big problem,” he said.

In addition, Muhyiddin also hoped the government will look at the increase in the OPR while finding ways to help reduce the people’s burden in Budget 2023.

“For me, if there are no decisive steps in the presentation of the budget (by Prime Minister Ismail Sabri Yaakob), if it is not addressed and not seen serious to deal with such problems, the budget won’t have an impact and will not help speed up recovery and help ease the people’s burden,” he said.

Two days ago, Bank Negara Malaysia’s Monetary Policy Committee announced the highest and lowest corridor rates for the OPR, increasing them to 2.75 percent and 2.25 percent, respectively, which is the third increase this year after increases in May and July.

It also invited public concern about the possibility of having to pay a loan at a higher rate.

Meanwhile, Muhyiddin who is also Perikatan Nasional chairperson, said the Jualan Prihatin Rakyat, which received a warm response after being organised several times in Pagoh, will soon be expanded throughout the country.

The Pagoh MP said for RM20, they can get a 5kg bag of rice, a tray of eggs and chicken through the Jualan Prihatin Rakyat programme that began in August, adding it was an effort from his side to help the B40 group.

Therefore, he urged the private sector to participate in the programme.

- Bernama