The extension will allow SMEs and entrepreneurs to tap and benefit from the various initiatives that have been introduced under Penjana
by AFIQ AZIZ/ pic by RAZAK GHAZALI
THE Federation of Malaysian Manufacturers (FMM) urges the government to grant a further six-month extension of the automatic loan moratorium that will end in September.
The association also appealed to the government for further assistance, including a six-month moratorium on all short-term National Economic Recovery Plan (Penjana) financing schemes, one-year stamp duty exemptions on all loan and financing instruments starting July 1 and that the stamp duty exemptions be extended to mergers and acquisitions and partnership agreements agreed on or signed prior to the outbreak of the Covid-19 pandemic and disrupted by the Movement Control Order (MCO).
FMM president Tan Sri Soh Thian Lai (picture) said the extension is much needed by the small and medium enterprises (SMEs) and individuals as it will ease the tight cashflow that they are currently facing.
“The extended moratorium can provide financial relief to those who are currently economically disadvantaged, especially companies that are struggling to sustain their businesses and workers who have been retrenched and have lost their source of income,” he said in a statement yesterday.
Soh added that the extension would allow SMEs including entrepreneurs to tap and benefit from the various initiatives that have been introduced under the Penjana, hence ensuring the quick recovery of the economy.
“The extended moratorium will help the economy recover quickly without further burdening businesses with the cost of servicing their loans or financing and indirectly reduce their cost of business survival,” he said.
According to FMM, the MCOs have resulted in businesses experiencing a big drop in revenue, suffering financial losses and facing severe trade challenges which have impacted sustainability, employment and productivity.
“Many businesses, especially those in the non-essential products and services, only commenced operations after the Recovery MCO on June 10,” Soh added.
Soh also said a huge claim from employers for the Wage Subsidy Programme (WSP) indicates that companies are dying to sustain especially in terms of employment costs.
As of July 6, about 310,622 employers covering 2.48 million workers had benefited from the programme.
“The majority of these companies would have applied for assistance from April, while trying to manage their employment cost. Companies are not allowed to terminate the services of these employees covered by the WSP for a further three months after the end of the WSP payment period.
“The WSP, which has been extended for a further six months, would likely end in September. This would coincide with the end of the current loan moratorium period and would be a double cost whammy on businesses which could severely impact their sustainability and initiatives to revive their businesses,” Soh said.
Meanwhile, the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) hopes that Bank Negara Malaysia (BNM) will announce a follow-up flexible repayment programme to help individuals and businesses manage should the moratorium not be extended.
“BNM has informed that financial institutions are actively engaging with borrowers to offer assistance for their loan repayment and credit facilities after the end of automatic loan moratorium in September 2020.
“Among the flexible repayments include lower monthly instalment, step up repayment and loan tenure extension.
“The targeted approach will assist sectors and borrowers that operate and work in highly vulnerable industries and sectors, which would take a longer time to recover,” ACCCIM president Tan Sri Ter Leong Yap said in a recent statement.