Transparency concerns in BNM’s SME relief fund
By Emmanuel Samarathisa |   |  Opinion

By Emmanuel Samarathisa

BANK Negara Malaysia (BNM) yesterday said that since the special relief facility (SRF) was made available on March 6, participating financial institutions (PFIs) and BNM “worked swiftly” to implement the programme, to ensure that SMEs “benefit quickly.”

According to the central bank, as at May 4, the PFIs have approved more than 20,000 applications amounting to about RM10 bil. Due to “overwhelming” demand, BNM upsized the initial RM5 bil to RM10 bil that day. This will put money in the hands of more than 9,000 SMEs nationwide and help these businesses keep more than 200,000 jobs.

These are nice intentions and figures. Save for the fact that the SRF deserves some scrutiny. Firstly, has BNM made any announcement prior to yesterday’s press conference that it had any intention to upsize the facility? When was this decision made?

On May 7, SME founders told FocusM that they were informed by their respective banks that the SRF had dried up. This is the note they received: “We have been informed by Bank Negara that the BNM Special Relief Fund total allocated amount of RM5 bil has been fully utilised. Hence we are unable to proceed with your application.”

Because many of them were not recipients to the SRF, naturally they had called for the government, as well as the bank, to be transparent and provide a detailed breakdown of the SRF’s beneficiaries.

That is a fair request. BNM’s communications have not been the best of late. Earlier, there was a huge gaffe over the moratorium on hire purchase loans, so much so that Finance Minister Tengku Datuk Seri Zafrul Tengku Aziz had to come out and apologetically admit that the bank had to communicate better.

But what was insidious during that whole episode was the way BNM changed the frequently asked questions (FAQs) to reflect the newer policy. When the Association of Banks Malaysia issued the statement explaining how the moratorium for hire purchase loans worked, and there was uproar, the bank quietly changed their FAQs.

This led to social media users calling out BNM for being unethical in changing the FAQs without informing the public. BNM then changed their FAQ again to what we have today and that also came only after hours of amending the original document.

A few SME owners yesterday told FocusM that they were informed by their respective banks that despite BNM topping up the SRF, because their applications were made a day after May 4, they were not entitled to the SRF but could opt for other loans at relatively low interest rates.

But the question is, why weren’t they told this when they applied for their loans? Instead, they were informed that the fund had dried up.

It is understood that the SRF, even at RM10 bil, will not cater to all SMEs. We get that, but the way BNM is going about handling this matter deserves a better take.

The one way BNM can allay concerns of compromise and political capture is to firstly do a better job at communicating policy changes to everyone. It is the central bank, not the bank of the privileged few.

Secondly, it has to be transparent. Who received these funds? Because if you think about it, it does look good on an SME who has been a beneficiary of the SRF. It also boosts confidence for the bank, because who doesn’t love a central bank that is open and transparent? - May 14, 2020

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