BUSINESS

BNM TELLS VULNERABLE SMES START ENGAGING WITH BANKS TO RESTRUCTURE BUSINESS FINANCING

14/08/2020 04:35 PM

KUALA LUMPUR, Aug 14 -- Small and medium enterprises (SMEs) that require financial restructuring to support their business activities while slowly recovering from the COVID-19 pandemic can start to meet their respective banks, Bank Negara Governor Datuk Nor Shamsiah Mohd Yunus said.

She said the financial assistance provided by the bank include the reduction in interest rate cut, extension of the (targeted) moratorium or taking up new loans to generate new cash flows for new businesses.

Since January this year, BNM has reduced the overnight policy rates by a cumulative amount of 125 basis points to 1.75 per cent, the lowest after being set 16 years ago.

The moratorium, which came into effect on April 1, saw over 90 per cent of borrowers taking advantage of the assistance amounting to RM66.6 billion as of July 31.

Out of the total, RM23.3 billion was utilised by the business sector while RM43.3 billion by the public.

The repayment flexibility ends on Sept 30, 2020 but banking institutions are expected to provide the affected borrowers with other means or targeted assistance.

“The banks have been supporting their customers for a long time and they know the strength of the customers. They can also customise the financial product that will be more suitable for that customers to remain viable,” she said at a senior editors briefing on Thursday.

On that note, Nor Shamsiah urged the SMEs, the backbone of the economy, to contact their banks and have conversations.

Citing an example, she said the pandemic had given the advantage for those in the healthcare sector to produce personal protective equipment to boost up their businesses.

However, she stressed that the logistics part played an important role, as to speed up the delivery process.

For the second quarter alone, banks have provided financial support to businesses at a lower rate, having disbursed about RM181 billion, of which RM56 billion is for the SMEs.

Separately, in a live stream second quarter results today, the governor said effective Sept 1, the central bank’s Credit Counseling and Debt Management Agency (AKPK) will start offering specialised solutions to help the SMEs, including micro SMEs, to manage their debt and promote sound financial management practices.

This follows from the transfer of the Small Debt Resolution Scheme (SDRS) function from BNM to AKPK.

“With this transfer, AKPK will serve as the one-stop platform for both individuals and SMEs seeking debt restructuring services, as well as financial education and advisory,” Nor Shamsiah said.

-- BERNAMA

 

 


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