Loan moratorium move a temporary solution to deeper problems, says Anwar
The announcement by Prime Minister Muhyiddin Yassin on the selective extension of the moratorium on bank loans by three months only offers a temporary solution to a deeper problem, said PKR president Anwar Ibrahim.
"I call on the government to implement a more holistic approach in addressing rising unemployment and poverty levels in the country...
The announcement by Prime Minister Muhyiddin Yassin on the selective extension of the moratorium on bank loans by three months only offers a temporary solution to a deeper problem, said PKR president Anwar Ibrahim.
"I call on the government to implement a more holistic approach in addressing rising unemployment and poverty levels in the country.
"We have highlighted that almost 20 percent of Malaysia’s workforce is self-employed. During the MCO (movement control order), this group has been severely affected by the loss of income, with over 90 percent experiencing a drop in income and as much as 50 percent losing all income.
"The measures which have been announced do not ensure benefits will reach the self-employed and those in the informal sector, especially the urban poor and rural groups," said Anwar in a statement this morning.
He acknowledged that the extension is meant to benefit individuals who need help, specifically those who have lost their jobs as a result of Covid-19 and the MCO.
"For those whose salaries have been affected, the banks will offer a proportionate reduction in loan instalment and these measures will provide some relief to the over one million people who are expected to become unemployed by the end of this year," he said.
Under the move announced by Muhyiddin yesterday, a borrower must have lost their job this year and yet to secure a new job to qualify for the three-month extension.
If their situation persists after the three-month extension, which expires at the end of the year, the banks may still provide a further extension for such individuals, depending on their respective situation.
Furthermore, borrowers whose salary has been cut due to the economic downturn brought about by the Covid-19 pandemic may seek a reduction in the monthly repayment that will be based on the proportion of the salary reduction.
However, Anwar highlighted that the moratorium and loan repayment flexibility is dependent on the application and approval process implemented by the banks, meaning that there is no compulsion for the banks to follow through.
"The relief which has been promised is not automatically guaranteed, and banks may have ultimate discretion in determining who does or does not qualify for the financial reprieve.
"I urge the government to exercise transparency and accountability in the delivery of this benefit to ensure assistance reaches those in dire need as efficiently as possible," said Anwar, who is also Port Dickson MP.
He claimed that Muhyiddin's government had previously misrepresented the amount of fiscal stimulus it has injected into the economy and direct aid it has provided to Malaysians.
"I am troubled by the recurring pattern of obfuscating facts while the real challenges facing Malaysians are not being adequately addressed.
"Five months into the pandemic we expect more honesty and a more complete approach to solving these problems.
"I urge the government to focus on developing comprehensive solutions to rising unemployment, poverty and inequality, establishing a sustainable social security programme to assist the poorest segments of society while the economy recovers, and providing more support to individuals and SMEs (small and medium enterprises) struggling with financial burdens during the pandemic," said Anwar.
