Deputy Finance Minister II Yamani Hafez Musa had stated that the government is finding a workable solution to implement an interest-free loan moratorium for borrowers and is still in talks with financial institutions as this involves a commercial decision between bank managements. There is no need for any delays as we are already in October where the 3 months interest waiver is supposed to commence.
One of the key requirements of the Memorandum of Understanding(MOU) for Transformation and Stability between the Prime Minister and four top Pakatan Harapan Leaders in Parliament House on 13 September 2021, is an interest payment waiver of the bank loan moratorium for the bottom 50% of all Malaysians, in terms of income classification, for a period of three months in the fourth quarter of 2021.
Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz had acted promptly by instructing banking institutions on 14 September to work on the exemption from interest payments for recipients of the bank loan moratorium. There is a need for the winners of the COVID-19 pandemic and economic recession to help those who lost their jobs and businesses as well as struggling to find work or survive.
One of the winners is the banking industry, whose profits continue to rise on the back of those struggling businesses and SMEs. The banking industry should learn to share after recording after tax profits of RM32.3 billion in 2019 and more than RM23 billion in 2020 despite the economic recession and is expected to do well this year.
DAP had suggested that such 3 months interest rate waiver should also include SMEs, who are in dire financial straits, following the failed management of the twin national crisis of COVID-19 pandemic and the ensuing economic recession. Then Entrepreneur Development and Cooperatives Minister Wan Junaidi Tuanku Jaafar said on 29.7.2021 that SMEs have suffered a total loss of RM40.7 billion in 2020 and that some 580,000 businesses, representing 49% of the SME sector, are at risk of failing by October 2021 if the economy has not fully reopened and they are not allowed to operate by then.
We are now in October and the economy has still not reopened fully. The government must realise that the nearly 1 million SMEs comprising 98.5% of all business establishments employ 7.3 million Malaysians in 2020, constituting 48% of the national employment. Since a full reopening of the economy will only likely happen next year, the interest waiver should also cover SMEs to rescue them from imminent collapse.
The country recorded more than RM500 billion in economic losses since the first total lockdowns were imposed last year. The worst hit is the tourism sector with RM130 billion losses in 2020 and even higher losses are expected this year. Even if the government is not considering interest rate waivers, there should at least be a reduction of interest rate by at least 2% for this beleaguered industry.