GEORGE TOWN: The Federation of Malaysian Manufacturers (FMM) has called for banks to extend the loans and financing moratorium period for another six months given the rapid contraction of the economy due to the Covid-19 global pandemic.
Its president Tan Sri Soh Thian Lai said that the extension would allow many small medium enterprises (SMEs) and industries the necessary breathing space to chart their recovery from the twin impact of the virus.
Industries are suffering from economic hardships as well as challenges to public healthcare due to the contagion effect of the virus, which has crippled the global economy and disrupted the worldwide supply chain mechanism.
He said that Malaysians are grappling with unforeseen challenges and they would need every ounce of support from the public sector to survive.
“An extension can ease the tight cash flow that we are currently experiencing.”
Extending the moratorium can provide some financial relief to those who are currently economically disadvantaged, especially companies struggling to sustain their businesses and workers who have been retrenched.
At the same time, it can allow the economy to recover quickly and provide SMEs and entrepreneurs more time to tap into the initiatives that have been introduced under the government’s Penjana recovery scheme.
Many businesses, especially those under the non-essential products and services, only commenced operations after the Recovery Movement Order Control Order (RMCO) on June 10.
Manufacturers supporting the construction and hospitality industries were further impacted as these sectors have only just resumed operations, given the additional conditions, precautionary measures and Standard Operating Procedures (SOPs) implemented before businesses could resume.
These sectors and supporting businesses would need time to tide over the Covid-19 disruptions and impact on businesses.
The Wage Subsidy Programme (WSP) as at July 6, 2020, has benefited 310,622 employers covering 2.48 million workers, Soh revealed in a statement.
These figures are an indicator that companies are unable to sustain operations and have to resort to obtain aid from the government to sustain their business costs and maintain employment of their workforce, Soh said.
The moratorium is scheduled to end by September with many employers uncertain over whether Bank Negara can intervene and authorise an extension.
Meanwhile, Finance Minister Senator Datuk Seri Tengku Zafrul Tengku Abdul Aziz, in his brief remarks to the proposal, had urged affected individuals to liaise with their respective lenders over revising their loan packages in view of the pandemic.
