By Johor Bahru: Richard Tan Wuu Chyau, Special Officer ( New Village Dept) of the Ministry of Housing and Local Government, pointed out that while RMCO is currently in place, workers in the entertainment industry, or those who cross borders to work in Singapore, are still unable to resume work. As such, Bank Negara should instruct banks to conditionally extend the moratorium on loan repayments.
Banks can set requirements for this, such as individual application for the extension of moratorium, or collecting partial interest only. Not only does this help Malaysians, it also reduces the pressure on our overall economy. The point is to put people first, and I believe that banks and financial organisations have the capability to do this.”
He pointed out that once the moratorium on loan/financing repayment ends in September, many middle and lower-income workers would suffer, as they have to face the pressure of loan repayment when income has not yet stabilised.
“These people have been digging into their savings since the beginning of the pandemic, especially those who work across the causeway. When the border was closed, leaving them no place to work and nowhere to go, the stress caused can be immense.”
He said economic activities in Johor has been severely affected, since Singaporeans could no longer visit. Everyone including small vendors, businesses, and places of entertainment have lost their sources of income.
He said the phase 1 government-implemented moratorium on loan and financing repayment, which lasts for 6 months, significantly reduces the stress on citizens.
“The Monetary Authority of Singapore stated that they will make an announcement in October, so people affected have time to adjust. This shows that Malaysians are facing problems that transcends borders, and cooperation is needed from both nations to help people overcome this tough time.”
He said the Monetary Authority of Singapore launched 2 rounds of aid packages in March and April to relief the stress on small and medium enterprises. This means allowing individuals to defer principal payments on mortgages up to the end of the year.
People can also convert card debts to a term loan, with an effective interest rate of 8 per cent. Life and health insurance premiums can be delayed for up to 6 months, and SMEs can defer principal payments on secured term loans until the end of the year. These are all examples Malaysia can take note of.
He believes that if the government does not implement a policy to buffer the stress of loan repayments, the country will face an increase in bankruptcy and junk debts, causing further disruption to this nation’s economy
