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BNM takes the lead, now we should have a gentler October.

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There’s always that feeling that come October, there will be casualties all over among the SMEs which will struggle to start repaying their loans. This is because their businesses which had been affected by the COVID-19 has yet to recover or for some not yet fully recovered. This is despite the reopening of the economy. The moratorium by Bank Negara Malaysia (BNM) will end by end September and though the banks have said that they are ready to accommodate those needing further extensions but it seems that the speed of this happening is slow. BNM has decided that they needed to help both the banks and the borrowers.

Article in edgemarkets.com . BNM has held a closed-door meeting with trade groups and the Association of Banks in Malaysia (ABM) and one key topic discussed was how the banks could help affected businesses with loan repayment restructuring. BNM is worried that many SMEs will struggle to repay their loans. Meanwhile, banks have also tried to reach out to businesses. At least one bank is said to have called out to a few hundred thousand clients on financial health and post-moratorium outlook.

SME Association of Malaysia president Datuk Michael Kang Hua Keong said, “I would suggest that Bank Negara instruct the banking industry to contact all their business customers about conducting R&R, provide a report to the regulator and subsequently make that report public.” Kang says that without a more robust outreach from the banking sector, there is a possibility of a larger than anticipated loan impairment and non-performing loans (NPLs) post moratorium. It’s a long and comprehensive article in theedgemarkets.com (click to read)

This is why I think we need to maintain and enforce all the SOPs we have for COVID-19 strictly and keep the economy open versus going back into a lockdown unless truly necessary. Seriously, the banks could not do this forever yeah even if they are at a strong position before COVID-19 strike and thus they could agree to the moratorium of 6 months across the board.

As for COVID-19, it’s not likely to be eradicated so soon as even the vaccines are not ready and if they are ready, then which are the countries which will get it first? It’s a world of ‘I save myself first’ at the moment when it comes to the availability of such vaccines in the near future. This is why the base of it all, whether it’s for the economy or for the SMEs, is to wear masks and follow the SOPs strictly. Happy buying and supporting the local economy.

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