Targeted support should be directed at facilitating businesses to transform and adjust their operations effectively post-coronavirus
by SHAHEERA AZNAM SHAH / pic by MUHD AMIN NAHARUL
LOCAL businesses and sectors heavily impacted by the Covid-19 pandemic require continued cashflow assistance from the government in order to recover and become sustainable in the long run, according to business groups.
A report released by the Asean Business Advisory Council (BAC), Malaysia recently stated that banks should continue to provide support for micro, small and medium enterprises (MSMEs) in affected sectors such as travel, tourism and retail industries by offering leeway on loan repayment obligations.
“As some businesses and sectors would take a longer time to heal, banks should continue to provide more compassionate support in facilitating borrowers’ loan repayment obligations during this critical moment,” the report stated.
The government’s financial relief and soft loan schemes to support MSMEs for financing, business revitalisation and transformation have so far registered a mixed level of utilisation rates, the report noted.
“Some of these funds have a low utilisation rate of between 2.4% and 5.4%,” it highlighted.
The report titled “Pathway for Malaysia 2021” also called for easy access to loan facilities for businesses in terms of criteria and application process, as well as lowering the cost of borrowing.
As the national economy has yet to recover fully, it said local businesses require supportive operating policies to help them adjust and implement changes to keep their operations afloat in a post-Covid environment.
“To enable and encourage business restructuring and recovery, targeted support by the government should be directed at facilitating businesses to transform and adjust their operations effectively post-coronavirus.
“Although the government has lifted some of the stringent economic and movement restrictions in stages, businesses continue to be affected by the need for social distancing, while some are still unable to operate.
“Until the effective vaccination programme is accelerated and achieves an 80% herd immunisation by the first quarter of 2022, some operations will continue to be affected,” the report noted.
The report — produced by Asean BAC Malaysia in collaboration with CARI (CIMB Asean Research Institute) Asean Research and Advocacy — provides recommendations by the private sector in response to the recent major developments and pandemic recovery in the country.
The recommendations were based on the feedback from 46 entities consisting of Malaysian trade associations, chambers of commerce, professional bodies and foreign business associations, as well as councils based in the country.
At the regional level, it said restoring production networks and supply chain integration is key for local manufacturers to mitigate the impact of the pandemic.
“Nowhere has this been more crucial than with our Asean or Regional Comprehensive Economic Partnership counterparts.
“Not only as a nearshore source for inputs and Malaysian manufactured exports, but also the possibilities of deeper integration through the ongoing initiatives under Asean to promote trade and investments.
“Moving forward, issues faced by manufacturers in exporting and investing in Asean markets need to be addressed to assist in their recovery and help build resilience from the crisis,” it said.