12 Jul - 2 min read
Malaysian businesses are pleading with banks to consider lowering the interest rate during the latest six-month loan repayment moratorium. While the banks have agreed to waive compounded interest and penalty charges, the PEMULIH moratorium is nonetheless not interest-free in nature.
SME Association vice-president Chin Chee Sion said that cash-strapped businesses had no other choice but to opt for the moratorium as they have to shoulder business costs such as rent, which could mount up to hundreds of thousands of Ringgit each month.
“We have fought for no-interest moratorium but the banks are not giving in. It is the time for them to help,” he said.
Malaysia Retail Chain Association (MRCA) president Shirley Tay agreed that since retailers are not allowed to operate under the current phase of the National Recovery Plan, the government should advise banks not to charge interest for the moratorium period.
“They don’t have enough cash flow right now to pull through this difficult time,” said Tay. She said that businesses, especially SMEs and micro enterprises, feel they have no choice but to opt for the moratorium to help shoulder the heavy costs of running a business amid Covid-19 restrictions. “They have no choice because to continue, they need to pay workers’ wages, rentals and licence fees,” she said.
She added that those who opted for the moratorium might have to think about paying the interest in the next six months.
Malaysian Hairdressing Association president Michael Poh said that banks could extend a lower interest rate instead of completely waiving interest. “There is no such thing as a free lunch so we understand that banks won’t be able to completely waive the interest because they also need to survive. Extending lower interest to borrowers is the best situation,” said Poh.
Datuk Ameer Ali Mydin, who is managing director of Mydin and Malaysia Retail Association vice-president, also voiced that banks should consider lowering interest rates to allow more businesses to breath easier. He additionally proposed that the moratorium should be extended to those with more than three months’ arrears on their loans.
“We have endured difficulties for the past 16 months, and there will be individuals or businesses who have not been able to service their loans for three months or more, making them ineligible for the moratorium,” he said.
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