The government has been urged to introduce a special loan moratorium to support struggling businesses affected by the Covid-19 pandemic.
Federation of Malaysian Business Associations (FMBA) chairman Datuk Abdul Malik Abdullah also urged the government to extend the enforcement of the Temporary Measures For Reducing the Impact of Covid-19 Act 2020 (Act 829) as some businesses are still recovering from the Covid-19 pandemic as well as the current economic situation.
“Introduce a special (loan) moratorium to give space to their businesses to re-strengthen the financial flow of their respective businesses that still cannot recover due to the current economic situation.
“Business entrepreneurs need support and not pressure in jointly driving their respective businesses towards recovery and excellence in line with the Government’s efforts,” he said in a statement on Tuesday (Oct 4).
Abdul Malik added that the decision to call for government intervention was made after hearing feedback from members during its annual general meeting on Sept 27.
He said that the group is of the opinion that when Act 289 ends on Oct 22, businesses will no longer receive special protection from creditors.
“The matter has clearly been proven when the law was almost withdrawn last year has seen banking or financial institutions have started pressuring businesses to get back the amount of loans owed without looking and/or considering the current economic situation of the business until some have taken steps to declare the company director for the business bankrupt,” he said.
He also added that the matter had affected the score of the financial position of those businesses when they have been listed in the credit reporting agencies system and by the Malaysian Insolvency Department.
“It will take time to settle the debt and could not be involved in any future business.
“This will also affect the economy when businesses that can recover and return to competitiveness have to close,” Abdul Malik said.
The law was first passed in the Dewan Rakyat on Aug 25 and Sept 22, 2020 in the Dewan Negara to address the inability of businesses to perform contractual obligations, among others.
(with inputs from ANN)