Make moratorium extension automatic for B40 and M40 groups, MTUC urges government 

KUALA LUMPUR 29 July - MTUC welcomes Prime Minister Tan Sri Muhyiddin Yassin’s announcement today that individuals and SMEs will be offered various options by banks with regard to the repayment of their loans once the current moratorium ends on Sept 31.

However, its Secretary General, J. Solomon said, in offering the options, including a three-month extension on the moratorium on loan repayment for those who remain unemployed after losing their jobs this year, the prime minister said companies and individuals would need to apply to their respective banks beginning August 7.

"MTUC strongly urges the government not to leave the poor and marginalized at the mercy of the banks by forcing them to apply for an extension of the moratorium or amending the terms of their loans / hire purchase agreements.

"The government should instead automatically extend the moratorium by at least six months for all B40 and M40 families, irrespective of their employment status.

``Those who are working but forced to take pay cuts, are in need for the moratorium to be extended, just as much as those who are jobless,'' he said in a statement, today.

Database

The Inland Revenue Board and other government agencies have a comprehensive database on B40 and M40 families used in providing various assistance including cash handouts under the Prihatin package. Banks can use this database to approve an automatic six month extension of the moratorium to the targeted groups. 

According to Solomon, these marginalized B40 and M40 groups are the ones who need most an extension to the current moratorium, as many of them are either without jobs or have been forced to take pay cuts.

``All of them have been badly affected by the rising cost of living, especially foodstuff during the Covid 19 pandemic. As such, compelling them to apply to banks to grant them an extension to the moratorium, as announced today, is an unnecessary burden and a bureaucratic hassle placed on them in their hour of need,'' he said.

Furthermore, banks are known to be over stringent with their requirements especially on documentation. 

Deserving

``It is MTUC’s firm belief, that the bank application process itself will see many deserving B40 and M40 applicants being denied in getting their moratorium extended or benefit from the other options that was announced by the prime minister.

``While we have no problem with the Finance Ministry and Bank Negara adopted a ‘targeted assistance’ approach in helping troubled SME and individuals affected by the Covid-19 pandemic, the B40 and M40 families must be  automatically given the moratorium extension as they remain in dire straits despite the gradual reopening of the economy,'' he added.

``This is something the government can easily arrange as we see no reason to subject the B40 and M40  group to formally apply to the banks for the moratorium extension.

``If the B40 and M40 Malaysians are eligible to receive government assistance under the Prihatin package, they should be offered automatic extension on the moratorium by the banks based on the same data used by the government,'' he said.

Six months

Solomon said,  MTUC feels a six month extension to the moratorium is something that financial insititutions can afford to grant B40 and M40 borrowers automatically. 

``We wish to reiterate that banks do not suffer losses in granting the moratorium as they will collect their dues down the line.

``With international trade still largely crippled and domestic demand remains weak, the economy is still unable to put enough food on the table for many B40 and M40 families, let alone enable them to service their housing, car and personal loans. 

``These group of people very much need the help of the government which, after helping them initially,  must not now leave them at the mercy of banks,'' he concluded. - DagangNews.com