Tuesday, July 7

Suspend all loan repayments – employers

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Yap

KOTA KINABALU: Malaysia is experiencing a global pandemic, with the whole country now under unprecedented Movement Control Order (MCO) in an attempt to contain the spread of Covid-19 virus.

“Sabah is facing the worse consequence as a result of this. Reeling from the impact of virtually zero tourism, free-fall in oil prices, flat-lined oil palm prices, the state is now entrapped as a partner in the country’s common fight against Covid-19 whilst trying to ensure its own survival to come out unscathed when the crisis is over.

“We at Sabah Employers Association see that the sole factor that will assist greatly current containment measures, as well as to spur revival when the virus is tamed, is liquid cashflow.

“Liquid cashflow allows businesses to continue paying staff salaries despite being in shut down mode.

Cashflow to allow family to purchase sustenance food items so can hunker down during the lockdown period.

“It is this factor that is now creating pressure for everyone in the state – finding money to pay salaries, pay rent, pay loans, pay utility bills, pay for food items,” said SEA president Yap Cheen Boon in a statement here yesterday.

The moratorium on bank loans currently being offered by banks are good gestures. However the measures imposed are discretionary.

Businesses and individuals have to apply, then wait for approval from banks to see if approval is granted for three months up to six months.

Instead, SEA believes that Sabah Government can step up and be the lead negotiator for all Sabahan businesses big and small, all Sabahan households and individuals, to demand from Bank Negara Malaysia to impose Automatic Suspension of all loan repayments for six months, from all banks, for Sabah.

“This is not as radical a measure as it seems. Many Euro countries such as Italy, the United Kingdom and France are adopting the suspension of mortgage and business repayments to help businesses and citizens to tie through the liquidity crunch arising from Covid-19 crisis.

“US Congress is mulling over suspension of loan too, while Hong Kong government has gone one step ahead of handing out HK$10,000 to each and every HK citizen, without discretion.

“The Covid-19 virus does not discriminate. As such stimulus package should not discriminate.

“Automatic suspension of all loan repayments would mean no desperate business and individuals physically crowding the bank branches to fill in and submit applications. It also does not grant discretion to banks to cherry pick who will or would not get delayed loan repayments,” Yap said.

When MCO was issued, he added: “Everyone plays the part equally, and bear the consequences equally.

Banks would not see losses on their balance sheet from the suspension, instead just a delayed income effect”.

“The immediate result to the state; to the businesses now gasping for air, to the individuals and households desperately needing sustenance food items to survive, is a huge release of pressure against having to run around, to struggle to get hold of cash; substituted by a sense of calmness to stay put at home.

“With the liquid cashflow pressure eased, spending by individuals and households will spur businesses to kick start operations once the crisis is over and lock down is lifted. This will spur a burgeoning local economy boosted by own local consumption, and local business activities.

“From united citizens a strong government is risen. The timing is critical, the timing is now, for the 50,000 businesses employing 1.2 million workers, and almost three million Sabahans facing the virus crisis,” he concluded.