Sabah Employers Association calls on Bank Negara to review extension of loan moratorium
KOTA KINABALU: Employers in Sabah want Bank Negara to take a closer look at the actual financial situation of borrowers as they call for an extension of the moratorium on loans.
Sabah Employers’ Association (SEA) chairman Yap Cheen Boon said Bank Negara should look at the financial situation of many workers who are unable to repay their loans, let alone cover their living expenses.
He said many were now facing financial problems, especially with the Conditional Movement Control Order (MCO) which came after most were trying to recover from the first MCO earlier this year.
Yap said many state employees and even employers now feared not only the Covid-19 pandemic, but also their ability to repay their loans.
He said statistics provided showed 640,000 borrowers had applied for nationwide repayment assistance for their loans from their respective banks, and added that the numbers raised more questions.
“Of the total pool of eight million borrowers, including individuals and small and medium-sized enterprises (SMEs) in the country, the fact that only 640,000 or 8% chose to apply (for a moratorium extension) raises more of questions, ”Yap said.
He said Bank Negara should find out more about the data provided by the banks and ask what happened to the other seven million borrowers and added that the central bank should see if these borrowers were able to raise the funds. to pay.
Yap said that since October 1, banks have been demanding an 85.5% repayment rate since October 1, but added that they “diligently” deduct installments from borrowers’ accounts in the first week of the loan. ‘October.
“These funds are invariably set aside (by borrowers) for more critical purposes such as paying overdue bills, food and other expenses to stay afloat,” he said in a released statement. Saturday 24 October.
He said the SEA has seen cases where requests for extension of the moratorium are still being considered, with payments being deducted in early October and another deduction looming in early November if no decision is made. socket.
“It is not wrong to say that allowing deductions while claims are under consideration is doomed to failure, if not hypocritical in nature. It is demoralizing and puts more pressure on individuals as well as on businesses, ”he added.
Yap said the situation could last until the end of the year and added that it would take time before things turn around.
He said a moratorium on loans should be extended until the end of the year to ease the financial burden on Sabah employees and employers.
Yap added that state employees and employers remain insecure as many economies in trading nations slowly recover due to the continued rate of Covid-19 cases.
He said the latest MCO left some 800,000 workers at home and that a moratorium on bank lending would help them amid a massive contraction in the economy following the second round of movement restrictions put in place. .
SEA is the latest organization to call for a loan moratorium with many chambers of commerce, political parties and unions also pushing for an extension of the loan moratorium.