SMEs in dire need for automatic loan moratorium

by NUR HANANI AZMAN / pic by TMR FILE
 
THE SME Association of Malaysia urges the government to provide automatic bank loans moratorium, interest free without any condition and extends to six months for all borrowers with immediate effect.
 
With the Movement Control Order (MCO 3.0) total lockdown, President Datuk Michael Kang said at least 40% of small and medium enterprises (SMEs) to shut down their businesses.
 
“SMEs are in need of help immediately and this automatic moratorium is highly required to ease their cash flow.
 
“Many workers will lose their jobs in the coming months and especially in June and July,” he said in a statement while strongly urging the government to look into this urgently.
 
He believes with emergency ordinance, there is no issue of not being able as indicated by the Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz to implement even with objections from the banks.
 
Michael said it was reported yesterday that one restaurant operator who has been operating in the capital for decades and has been struggling to survive since the outbreak of the epidemic has decided to close down its business.
 
“This is just a tip of the iceberg that many others will expect to follow suit. With the prolonged pandemic, most SMEs are struggling to make ends meet, with their resources slowly being exhausted, and the worries about not being able to cope with rent, employee salaries and utility bills.
 
“They have no other choice but to take this path to terminate their businesses,” he added.
 
With the deteriorating economy and high daily numbers of Covid-19 cases, Michael urged the government to speed up the national vaccination program to quickly revive the economy to help the businesses, peoples and the banks as well.
 
Michael added that SMEs to adopt a serious attitude when it comes to fighting Covid-19 by allowing their workers to work from home as much as possible to help curb the spraying of the virus.
 
“For all Malaysian, staying at home and strictly following the standard operating procedures are the keys to winning this war,” he concluded.
 
The Malaysian Reserve (TMR) on June 8 reported that at least 50,000 more SMEs may be out of business should the MCO 3.0 extend another six weeks.
 
SME Association of Malaysia national VP Chin Chee Seong said about 100,000 companies have ceased operations since the first MCO.
 
“The affected SMEs, especially in retail and food and beverages (F&B), are just hanging on at the edge of a cliff. About 40% have indicated that they will shut down their businesses should the lockdown continue for the next four weeks.
 
“From our recent survey, only 8.6% of the SMEs said business is as usual, but the remaining 91.4% indicated that they will suffer losses from 25% to 100%,” he told TMR.