THE Proton Vendors Association (PVA) has called for Bank Negara Malaysia to revisit the approval process for the RM1 mil relief loan for the business community, stating it is far too slow.
“Based on our members’ feedback, the banking channels handling the Relief Loan of RM1 mil for the business community is far too slow. Many are still waiting. BNM needs to revisit the approval process. In these challenging and unprecedented times, it will be in the businesses’ best interest for financial institutions to depart from the conventional processing of loan applications,” PVA president Datuk Dr Wan Mohamed Wan Embong said.
“Pledges of business support are meaningless if the pledged funds do not reach the business community at the right time. The potential outcome will be the collapse of the supply chain,” he added.
Wan Mohamed noted that, except for a small minority, most vendors have depleting financial reserves with wages and salaries needing to be paid. Until the loans are disbursed, the majority of businesses “will have to scratch the bottoms of their financial reserves.”
“Even with massive government Stimulus Relief Funds, the economic recovery will most likely be long and slow. Any lengthy lockdown will no doubt bring stress to most businesses. And we are looking at every possible means to ensure the vendors don’t go under. The longer they stay away from work, the more severe their dislocations will be,” he said.
On the topic of economic recovery, Wan Mohamed believed policy makers will strike a balance between the efforts to mitigate and combat the spread of Covid-19 against a potential economic recession.
“While prolonging stringent lockdowns may flatten the curve, the inordinate economic costs are dire. What is needed is a balancing act between lives on the one hand and loss of
economic production on the other. At some point, the economy is expected to bounce back. We are aware that the first prerequisite for economic recovery will be a public health solution. The Covid-19 outbreak will need to be firmly under control before the economy can
resume under normal conditions,” said Wan Mohamed.
Currently, the automotive industry is one of the critical sectors contributing 4.5-5% of Malaysia’s gross domestic product (GDP). It has a high economic multiplier effect with direct and indirect employment of about 750,000. — April 17, 2020
