28th July 2020 - 2 min read
Banks have reached out to more than 394,000 borrowers who are still impacted by the Covid-19 pandemic to offer loan and restructuring aid, said Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz. This includes 75,000 affected small and medium-sized enterprise (SME) customers.
“Banks are proactively contacting borrowers to offer assistance, including extending the loan tenure so that the monthly instalments could be reduced, as well as other suitable exemptions until they are able to strengthen their financial footing,” said Tengku Zafrul. He added that financial institutions are also offering amendments to the main terms and conditions of loans at lower interest rates, such as converting overdraft facilities to term loans.
The finance minister further said that the government has been urging borrowers who foresee difficulties in financing their debts post-moratorium to contact their respective banks as soon as possible. This will ensure that they are able to negotiate for more suitable loan repayment plans.
“The government, through Bank Negara Malaysia (BNM), is monitoring efforts undertaken by banking institutions, Credit Management and Counselling Agency (AKPK), and Small Loan Settlement Scheme to ensure that eligible borrowers are getting the help that they need. The assistance extended to borrowers has to be balanced with efforts to ensure that banking institutions remain resilient so that they can continue financing economic activities and support economic recovery,” said Tengku Zafrul.
To date, more than 7.7 million individuals and 243,000 businesses have tapped into the moratorium to help them weather the financial storm during the movement control order (MCO). Tengku Zafrul also noted that more than 21,000 borrowers have received aid from banks with regards to their loan repayment plans in the first half of 2020, compared to 14,000 borrowers in the whole of 2019.
The ongoing six-month moratorium was implemented in April, and is set to end in September 2020. There have been calls by various parties, including the Malaysian Trades Union Congress (MTUC) and the Federation of Malaysian Consumers Associations (FOMCA), to extend the moratorium. Conversely, some banks – such as CIMB and AmBank – have said that they are more likely to offer a targeted moratorium instead of a blanket extension.
Meanwhile, Tengku Zafrul said that the government will make an announcement soon regarding the extension of the moratorium.
(Source: The Edge Markets)
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