Muhyiddin: Ismail Sabri refused to enable loan moratoriums

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Perikatan Nasional (PN) chairperson Muhyiddin Yassin said his appeals to the Ismail Sabri Yaakob-led government for a moratorium on loans taken out by micro, small, and medium enterprises (MSME) were rejected.

Former prime minister Muhyiddin was made chairperson of the National Recovery Council (NRC) by his successor Ismail Sabri last September.

“The NRC has suggested it before but the government under Ismail Sabri did not want to implement it.

“It does not burden the government. The government does not even issue RM1 and if we do give them a moratorium, banks will implement it but use their own money. Not the government’s money,” he said.

He was responding to questions regarding PN’s steps to overcome the effects of a global economic recession if he succeeds in forming the government after the 15th general election (GE15).

Muhyiddin said despite implementing loan moratoriums, banks stand to make a lot of money within a few months after the country reopens its economy.

“It does not affect the bank’s financial performance and they will declare profits,” he said.

He pointed out that PN’s election manifesto includes promises to grant a moratorium on loans to help MSMEs.

He also revealed that, not on the manifesto, is his coalition’s serious consideration of implementing another round of withdrawals from government-managed retirement funds.

More EPF withdrawals

Muhyiddin said the coalition was considering releasing another tranche of Employees Provident Fund (EPF) monies in a targeted manner to ease the burden of those affected by the current economic downturn.

“The coalition is ready to review it but we must first consider how much is left in their savings.

“If they run out (of EPF savings), we can’t consider. But a targeted withdrawal allowance is a pertinent consideration,” he said.

However, in April, think tanks argued that recent EPF withdrawals have depleted RM40 billion of EPF funds and placed the future financial stability of poorer households at risk.

The Institute for Democracy and Economic Affairs (Ideas) as well as the Centre for Market Education (CME) observed that the move also hampered the retirement ability of the poor.

PN’s promise to MSMEs

PN also promises to incentivise the digitisation of product distribution, services, and skills training.

During the launch of its manifesto last night, the coalition announced that it will speed up economic recovery in the country by developing competitive MSMEs as a driver of growth.

This would include restructuring financing or implementing targeted moratoriums to help those affected.

For the record, a six-month automatic moratorium was granted to all borrowers during Muhyiddin’s administration in June 2021.

This was implemented on all loans across the board, whether micro-entrepreneurs, B40, M40, or T20 borrowers. – Malaysiakini