Prime Minister Tan Sri Muhyiddin Yassin has disappointed many Malaysians by failing to extend the bank loan moratorium by another 6 months when he presented an additional RM10 billion financial aid under Kita Prihatin yesterday. He said that up to 98% of applications for moratorium extension and targeted bank assistance have been approved, with over 1.4 million borrowers, and over 380,000 borrowers have confirmed they need such assistance.
However, this number of borrowers is still very much lesser than the 8 million individual and corporate borrowers benefiting from the automatic 6-month extension of bank loan moratorium.
The loan moratorium that will expire on 30 September 2020, had helped ease the burden on businesses and households affected by the post Covid-19, by deferring loan repayments, including for mortgage loans and hire purchases. The value of this loan moratorium to the 8 million individual and corporate borrowers is RM 90 billion, a huge financial relief that has helped save livelihood, businesses and jobs.
The targeted bank assistance and selective moratorium extension is very much inferior to the automatic 6-month bank loan moratorium extension. The uncertain economic recovery after Malaysia’s contraction of 17.1% of GDP growth in the 2nd quarter, the worst amongst ASEAN countries, is not helped by the second wave of COVID-19 infections happening in many foreign countries.
Tan Sri Muhyiddin should listen to the more than 6.2 million borrowers left out when the loan moratorium expires on 30 September, especially from Sabah voters facing a state election this Saturday, to extend the loan moratorium by 6 months.