KOTA KINABALU: The Sabah Employers Association has agreed with the Malaysian Trades Union Congress (MTUC) in a rare show of solidarity on calls to extend the moratorium for loan repayments another six months instead of ending it as scheduled on Sept 30.
Its president Yap Cheen Boon said ending the loan freeze on time despite the many domestic and international uncertainties was “at best premature and at worst succumbing to the cries of the banking industry against the predicament of businesses and individuals”.
“Now is the time for the government to show leadership in accepting that aggregated good necessitates small sacrifices,” he told FMT.
“The small cries of an industry should be carefully balanced against the deafening silence of the larger suffering group of stakeholders.”
MTUC, which has been vocal in pursuing an extension of the moratorium period, maintains that this will ease the financial burdens of the people given the economic turmoil, made worse by the Covid-19 outbreak and subsequent lockdown.
In voicing agreement with the call, Yap said the two groups normally sat “on opposing sides”.
“Sounding the same voice on extending the loan moratorium should warrant notice and serious reflection by the government,” he added.
He said extending the moratorium period another six months would allow the economy to recover as well as businesses to gain better footing and individuals and households to “breathe a little easier”.
“This will make the overnight policy rate reduction by Bank Negara more meaningful,” he added.
“Otherwise, without borrowers left, lowering the rates will be appealing only on paper.”
Finance Minister Tengku Zafrul Abdul Aziz said in the Dewan Rakyat yesterday that the government had yet to decide whether to extend the moratorium, and that the matter was still under discussion.
The Malaysian Employers Federation had also spoken on the subject, saying that ending the moratorium would hasten the end for many businesses irrespective of any targeted facilities offered by banks.
Yap said Sabah was seeing an unprecedented economic contraction of as much as 30%. He added that current unemployment figures had not reached such a level in 15 years.
He said to end the loan moratorium and allow a targeted approach by banks would perpetuate a “cherry-picking behaviour” which he said could be seen in the disbursement of relief funds during the movement control order period.
“How many vulnerable firms out of a pool of over 400,000 were able to access the relief funds in the end?” he asked.
He also questioned the outcome for firms that were unable to give a recovery projection for banks’ budgetary assessments as a result of the uncertain economic climate.
“Will they be deemed moral hazards and denied access to financial assistance?”
Sabah Small and Medium Enterprises Association president Foo Ngee Kee meanwhile voiced support for a selective moratorium, but not for the tourism and hotel industries.
He said hotels and tourism operators would likely be able to regain only 10% to 30% of their former business due to high fixed costs and large staff pools.
“The government should consider extending the loan moratorium for these industries until overseas travel is allowed from main markets like China,” he told FMT.
He also urged banks not to use a lower set of requirements to grant extensions of the loan moratorium.
He said such requirements would likely involve business and financial documents which smaller outfits might not be able to furnish.
He added that banks had “always” lent despite a lack of such documentation without any “major bad loans”.
“Why is there a tightening of requirements from banks during periods of crisis such as this? It is not for new loans, but to give time for businesses to pay.