Thursday, October 28

Include SMEs in three-month loan interest waiver, DAP tells Putrajaya

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Street vendors are seen waiting for customers on Jalan Tuanku Abdul Rahman in Kuala Lumpur, September 2, 2021. – Malay Mail photo

KUALA LUMPUR (Oct 4): DAP has called on the government to include small and medium enterprises (SME) in the three-month interest-free loan moratorium for borrowers, saying the group has been hit hard by the pandemic.

It said by the government’s own admission is July, SMEs have suffered a total loss of RM40.7 billion in 2020 and that some 580,000 businesses, representing 49 per cent of the sector, are at risk of failing by October 2021 if the economy has not fully reopened and they are not allowed to operate by then.

“We are now in October and the economy has still not reopened fully. The government must realise that the nearly one million SMEs comprising 98.5 per cent of all business establishments employ 7.3 million Malaysians in 2020, constituting 48 per cent of the national employment.

“Since a full reopening of the economy will only likely happen next year, the interest waiver should also cover SMEs to rescue them from imminent collapse,” its secretary-general Lim Guan Eng said in a statement here.

Lim said the waiver is one of the key requirements of the memorandum of understanding (MoU) between the government and the opposition.

He said there cannot be any delay of the moratorium implementation as Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz had acted promptly by instructing banking institutions on September 14 to work on the exemption.

However, one of his deputies Yamani Hafez Musa later stated that the government is finding a workable solution to implement an interest-free loan moratorium for borrowers and is still in talks with financial institutions as this involves a commercial decision between bank managements.

“There is a need for the winners of the Covid-19 pandemic and economic recession to help those who lost their jobs and businesses as well as struggling to find work or survive.

“One of the winners is the banking industry, whose profits continue to rise on the back of those struggling businesses and SMEs. The banking industry should learn to share after recording after-tax profits of RM32.3 billion in 2019 and more than RM23 billion in 2020 despite the economic recession and is expected to do well this year,” he said.

“There is a need for the winners of the Covid-19 pandemic and economic recession to help those who lost their jobs and businesses as well as struggling to find work or survive.

Lim also suggested a further reduction of interest rate by at least two per cent for the SMEs in the tourism industry, which suffered the most during the pandemic.

“The country recorded more than RM500 billion in economic losses since the first total lockdowns were imposed last year. The worst-hit is the tourism sector with RM130 billion losses in 2020 and even higher losses are expected this year.

“Even if the government is not considering interest rate waivers, there should at least be a reduction of interest rate by at least 2 per cent for this beleaguered industry,” he said. – Malay Mail