Malaysia: Loan moratorium won’t be extended, says Tengku Zafrul

• THE loan moratorium, which is set to expire in Sep 20, won’t be extended despite calls to lengthen the tenure, said Tengku Zafrul Abdul Aziz.
• Most businesses have already reopened and generating income, said the finance minister. Most employees are also back at work and earning an income, he said.
• The government also does not plan further cash injections, as the Prihatin and Penjana stimulus packages are already enough.
• “This depends on the economic recovery process of the country. For the time being, we do not have plans to add to the Prihatin and Penjana packages,” Tengku Zafrul said.
• The Federation of Malaysian Manufacturers (FMM) has called for the loan moratorium for small and medium enterprises (SMEs) and individuals to be extended a further six months. Former finance minister Lim Guan Eng also urged the government to extend to save businesses and jobs.
• THE end of 2020 will see more lay-offs and bankruptcies if banks do not extend their loan moratorium until Dec 20, said trade associations and private-sector unions.
• Low- and middle-income workers, who make up more than 80% of the workforce, will experience more retrenchments, said the Malaysian Trades Union Congress (MTUC). The MTUC, Malaysia’s largest private-sector union body, said this will then be followed by workers seeing their houses and cars being repossessed by banks as they cannot repay their loans.
• For the majority of small- and medium-sized firms, they will have to lay off more staff to make loan repayments as they are only re-earning between 30% and 40% of their usual income, said the SME association.
• The MTUC said the knock-on effect to the economy will be less consumption, because workers won’t have enough purchasing power, which will in turn further affect the income of businesses.
• Economists have warned that the economy will go into a tailspin if unemployment rises as it creates a vicious circle where consumers cannot spend, leading to weaker domestic demand.

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