PM: Targeted extensions for loan moratorium

TARGETED loan moratorium extensions will be allowed for those still feeling the pinch from the movement control order (MCO), according to Prime Minister Muhyiddin Yassin on Wednesday.

The loan moratorium, which is set to expire in September, is part of the Prihatin economic stimulus package.

“Following discussions with the Minister of Finance and the Governor of Bank Negara, I am pleased to announce the implementation of a moratorium extension and targeted bank assistance focused on those who really need it,” Muhyiddin said in a live TV address.

This, he shared, will allow for individuals who lost their jobs in 2020 and have yet to find new employment to enjoy a further three months under a targeted moratorium. This can be further extended after the three months, depending on the banks, according to individual situations.

For those who are still working but have seen their income affected or reduced due to the impact of Covid-19, monthly instalments will be reduced in accordance with the loss of income, depending on the type of loan. This, Muhyiddin said, will be for at least six months, and extensions can be granted depending on an individual’s income situation.

Muhyiddin said that banks will also be offering aid depending on individual circumstances, such as only paying the interest on a loan for a set period, extending the duration of the loan to reduce monthly instalments, or other forms of leeway until the borrower has stabilised his or her finances.

For hire purchase loans, banks will also offer instalment scheduling, based on the Hire Purchase Act.

“These steps are expected to benefit 3 million individuals and SMEs. If there are more who require assistance, banking institutions have committed to considering the appropriate form of aid. All those eligible can contact their banks to apply for this from Aug 7,” said Muhyiddin.

According to him, the loan moratorium saw over 7.7 million individuals receiving the benefits of the moratorium, valued at RM38.3 bil, as of July 20. This also saw 243,000 SMEs (95% of all SMEs in Malaysia) benefitting from the moratorium with RM20.7 bil.

The prime minister also shared that the number of people declining the moratorium has increased from 331,000 in April to 601,000 in July, with SMEs declining the moratorium also increasing from 5,000 to 13,000.

“However, I am aware that there are still economic sectors that are facing hardship and uncertainty. I understand that there are still businesses that are unable to operate at full capacity yet, and there are those who have lost their jobs and sources of income,” he added. – July 29, 2020

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