Sim Kiang Chiok

KUCHING: The targeted moratorium extension as well as other assistance extended to small and medium enterprises (SMEs) and individuals are very much welcome and will help businesses to stay afloat during the current Covid-19 pandemic, said Sarawak Housing and Real Estate Developers’ Association (Sheda) Kuching branch chairman Sim Kiang Chiok.

Under the extension, those who have lost their jobs this year and are still unemployed will have another three months of extension on loan moratorium until December, while those who have their salaries cut would have reduced loan repayment in their housing and personal loans.

Sim pointed out that the government wage subsidies, which were also important in keeping employment, would end in September this year.

“By then, we may see a surge in unemployment and this targeted loan moratorium is very important assistance to those who need it by then,” he said yesterday.

He noted that apart from the rescheduling and restructuring of loans, banks had given commitment to assist businesses, including payment of interest only for bank loans for a set time frame.

“This is a good method to reduce the burden of loan commitment for the borrower and also for banks which do not have to lend out again with the repaid capital in this poor and weak market,” he said.

He said that the Covid-19 pandemic had affected the entire world and some economies were still not operating at full capacity, borders were still closed, and the trade war between China and the United States of America was still ongoing.

Sim said that all these factors were dampening the supply and demand for goods, reducing world trades  and directly affecting the domestic economy as demand for exports was also reduced.

“This targeted loan moratorium will help to stabilise prices. There will be less bankruptcies, liquidation, less properties being auctioned, reducing the negative spiral of the economy  and all these might help us to avert recession or even depression,” he said.

Sim added that with a second and even third wave of the Covid-19 pandemic and no cure or vaccine available until next year, businesses were not going to be back to normal.

“If this pandemic cannot be controlled, the loan moratorium may have to be extended    for our economy to run without interruption,” said Sim.