NRC chairman Tan Sri Muhyiddin Yassin (centre) has urged the government, including Bank Negara Malaysia (BNM), to provide a moratorium for MSMEs that are still struggling financially.
THE Micro, Small and Medium Enterprise (MSME) operators have called on the government to grant them a special moratorium to enable them to restart and manage their business expenses post-Covid-19 pandemic.
The National Recovery Council (NRC) has put forward this recommendation to the government to assist such enterprises. Its chairman, Tan Sri Muhyiddin Yassin, said the council wants banking institutions to offer the moratorium to MSMEs, especially those who are still struggling to recover post-pandemic.
With the rising cost of living and prices of goods, MSME operators believe with the business loan offered under the moratorium, they could purchase the necessary materials and equipment to keep their businesses running and recovering.
Rashid Mohd Isa, 37, said he has been struggling to keep his business afloat due to losses he suffered at the height of the pandemic and the lockdowns imposed.
“The prices of raw materials are getting higher by the day and some of us just can’t afford to apply for loans as the interest rate is very high.
“Hence, extending or providing a special moratorium for MSMEs will, at least, alleviate their burden,” he said.
Muhyiddin said NRC recommended that the Ministry of Entrepreneurship and Cooperative Development (KUSKOP), Finance Ministry (MoF) and Bank Negara Malaysia (BNM) to consider extending moratorium to MSME operators since some of them are still unable to recover while their business continued to decline.
This is coupled with the increase in the overnight policy rate (OPR) five times this year, which has directly affected the performance of MSMEs that have been contributing 90 per cent of the country’s economic activity.
“In the last NRC meeting, the MSMEs requested that the banks look into the possibility of introducing another special moratorium. I believe even with another moratorium, the banks will not lose much,” Muhyiddin said.
The NRC has also set up a special action committee to address the issue of cash flow and financing constraints facing those who are still struggling to recover from the onslaught of the pandemic.
Expressing his grouses, Rashid, who owns a rug and textile shop in Kuantan, Pahang, said his business had to be closed for months. There was no income, nothing.
“The struggles were real as we needed to pay the rentals even without any income coming while some old stocks were spoiled due to poor ventilation. We lost so much money and even now, we are still struggling to run our business as everything is so pricey now,” he said.
He hopes the government will consider NRC’s recommendation for the sake of MSME operators to enable them to recover.
“We need more time to recover and manage all the losses incurred since 2020,” he said.
Businessmen are still struggling to regain their footing as the economic closure has impacted the cost of doing business which has risen drastically.
The Perikatan Nasional-led government under Muhyiddin, who is formerly prime minister, has channeled a total of RM6.08 million to more than one million MSMEs under the Geran Khas Prihatin (GKP) in 2020.
MSMEs are among the industries badly affected by the pandemic which has left behind its “trail of destruction” in the form of sudden increase in the price of essential goods, depreciating ringgit and the cost of bank financing which all in all has delayed the recovery of the country’s economy.
Meanwhile, Muthu Kaneson, 54, said he had to shut down his travel agency in 2020 as not many people wanted to travel anymore due to the pandemic, weakening ringgit and some other factors.
“Being involved in the tourism industry, we all know that this sector has been badly affected due to the global lockdowns imposed by all the countries around the globe. Even when the lockdowns were lifted, less tourists came, leaving us in dire straits,” said Muthu who received the one-off GKP of RM3,000 which lasted him for one to two months.
Despite closure of his company, he said he still has to make loan repayments and losses incurred during the pandemic. “At least, if the government gets the banks to offer us the moratorium, we can pay our debts. Give people like me hope so that we can start anew,” he said.
According to a recent data by the Department of Statistics Malaysia, MSMEs’ contributions to the overall gross domestic product (GDP) stood at 37.4 per cent in 2021.
In as far as employment is concerned, MSMEs contribute to approximately 7.3 million jobs for the country’s population. As such, without encouraging growth of this sector, the national economy will be at stake as MSMEs also form the backbone of the economy.
Like what Muhyiddin has said: “For me, if there are no decisive steps taken, then it will not have any impact and will not help speed up recovery and ease the burden of the people.”
Small-time entrepreneurs and traders believe that moratorium will provide them with financial relief that will help stabilize their finances amidst rising cost of living and OPR.