Relax lending rules for banks, Bank Negara urged

Sim Kiang Chiok

KUCHING: The National People’s Wellbeing and Economic Recovery Package (Pemulih) announced on June 28 will benefit many individuals and economic sectors during the Covid-19 movement control order (MCO) 3.0, said Datuk Sim Kiang Chiok.

The Sarawak Housing and Real Estate Developers’ Association (Sheda) Kuching branch chairman, however, felt that several measures should be implemented along with Pemulih in order to restore the country’s economy by the end of the year.

For funds to lend to small and medium enterprises (SMEs) through Pemulih, Bank Negara Malaysia (BNM), he pointed out, would add another RM2 billion to the remaining RM6.6 billion from the RM25.1 billion fund set aside for new SME applicants, bringing the fund balance to RM8.6 billion.

“This fund is expected to be able to meet the various needs of SMEs and micro-entrepreneurs in easing the cash flow constraints of their business,” he said in a statement on Wednesday (June 30).

Sim added that since most businesses had gone through 18 months of various levels of lockdowns and disruptions to their operations, most would need new capital to resume.

“BNM should allow banks to assist in recapitalising businesses and relax their lending rules, which are based on pre Covid-19 requirements that are difficult to meet now.

“The usual rules of proven income and excellent payment record must be relaxed, classification of non-performing loan (NPL) must be relaxed from three months to six months when the new bank moratorium ends in December this year. BNM must also allow banks to lend based on assets again so that it will be easier to raise new capital,” he said.

Sim said this would allow businesses and the economy to move forward and recover to pre Covid-19 level once the pandemic subsided by the end of the year.

He pointed out that the direct cash assistance through Bantuan Prihatin Rakyat (BPR) and Covid-19 Special Aid (BKC) would help a significant portion of the population.

He added that the Wage Subsidy Programme (WSP) 4.0 would help keep unemployment rates low and assist businesses in maintaining their manpower requirements.

He noted that WSP 4.0 had been extended and revised to cover more sectors, accommodating 500 employees for each employer at a rate of RM600 per employee for a period of four months. 

“This will be condensed to two months for every sector in the second phase of the National Recovery Plan (NRP) and another two months for the sectors categorised as negative in the third phase of the NRP.

“Previously, the implementation of the WSP was only applicable for employees with salaries lower than RM4,000. This 4.0 version of the initiative will have no such conditions, meaning employers can apply for the programme even for employees who earn more than RM4,000,” he said.

Sim was glad more cash assistance had been provided for micro-businesses under the Prihatin Special Grant (GKP) with additional RM1,000 to be granted to these small businesses to assist them through the NRP period.

“The main wish list of automatic bank moratorium has been granted for B40, M40, and T20, made available for six months from July until December. For SMEs, there are still some terms and conditions to fulfil before their banks will grant moratorium,” he said.

“In our development industry, we would not like to have NPL for house purchases as this would affect the market price of houses when banks put houses to auction due to non-loan repayment. It would have a negative spiral effect on the property market and banks’ own valuation or worth.

“Having automatic bank loan repayments moratorium for all including B40, M40, T20, and SME will help give time for the working society, businesses and industries to resume, recover and revitalise our business and economy on the path of growth again,” he said.