PUTRAJAYA decided to extend the loan moratorium to those who need further assistance, Prime Minister Muhyiddin Yassin announced today, days after his government said the deferments cost the banking sector RM6.4 billion in losses. 

The moratorium will be extended by another three months for those who lost their jobs this year and have yet to get a new one.

“I hear your calls to extend the loan moratorium which is set to end on September 30. I know there are many who were expecting the moratorium to be extended.

“On that note, I have discussed with the Finance Minister  and the Governor of Bank Negara Malaysia to find a solution to the problems faced by those who are still in need of assistance after the moratorium ends,” he said in a special live telecast today.

Banks will decide on granting them further extension depending on their situation and ability to service their debt, after the end of the three months extension, Muhyiddin added.

The loan moratorium extension and targeted aids is expected to benefit more than three million individuals and SMEs. 

Borrowers can apply from August 7 onwards. 

Muhyiddin said those who are still employed but had their pay cut will get their monthly payments reduced proportionate to their income.

“For example, for housing loans or personal loans, the monthly instalments will be reduced to a rate which is in line with the reduction of income,” Muhyiddin said. 

“This aid will be in effect for at least six months, and extension will be granted depending on the current income of the individual,” he added. 

He said banks are committed to providing targeted aid for individual borrowers, small and medium enterprises (SMEs), traders and the self employed individuals affected by the pandemic.

This includes servicing only interest payments for a stipulated period, extending the payback period for financial facilities, and other forms of exemption until the borrower’s financial footing is stable.

For hire-purchase loans, banks will also offer installment payment schedules in line with the Hire Purchase Act. 

“For example, increasing the payback period hence, lowering the monthly installment payment,” he added.

Muhyiddin said the government realises there are economic sectors which are still struggling despite the easing of movement restrictions.

“I understand that there are businesses which have not resumed operations fully and there are some of you who lost your jobs and source of income.”

Citing data from Bank Negara Malaysia, he said more than 7.7 million individual borrowers, or 93% of total borrowers, have benefited from the moratorium, amounting to RM38.3 billion. 

Similarly, 95% of SME borrowers or 243,000 businesses have benefited from the moratorium, amounting to RM20.7billion.

He also noted that there has been an increase in the number of borrowers to who decided not to opt for the moratorium, and who continue servicing their loans.

This number increased from 331,000 in April to 601,000 in July, and comes with the easing of movement restrictions anreusmption of operations in almost all economic sectors.

During the same period, the number of SMEs which decided to not opt for the moratorium also increased from 5,000 to 13,000. – July 29, 2020.