Monday 25 Sep 2023
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This article first appeared in The Edge Malaysia Weekly on May 4, 2020 - May 10, 2020

There is growing concern that many of the measures meant to assist individuals and small and medium enterprises (SME) during the current challenging environment may be just lip service — sounds good but poorly implemented.

For instance, Bank Negara Malaysia granted a moratorium on loan payments for six months in the wake of the Covid-19 pandemic, and banks are not to compound interest rates on the loans.

Similarly, Danajamin Nasional Bhd is set to provide RM50 billion in loan guarantees to ailing companies seeking to raise funds for working capital. The minimum loan size for this guarantee scheme is RM20 million and each guarantee is capped at 80% of the total loan taken for the purpose of working capital.

These and other forms of aid were mentioned by Prime Minister Tan Sri Muhyiddin Yassin when he unveiled the massive RM250 billion stimulus package to combat the impact of the pandemic.

How accessible are these measures? Do applicants have to jump through hoops to get help? Also, were the consequences of opting for the moratorium clearly communicated to borrowers?

These concerns come on the back of the Social Security Organisation stopping the processing of applications for the Employment Retention Programme (ERP) due to a lack of funds.

Given the limited resources and overwhelming demand, the vetting process will be important. Unfortunately, many will also be put off by the conditions that have been set.

The Minister of Finance has disclosed the number of applications for ERP and the Wage Subsidy Programme. It is hoped such public disclosure will continue for all measures. There should be transparency and due process to ensure aid reaches those who need it most.

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