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KUALA LUMPUR, July 29 -- Prime Minister Tan Sri Muhyiddin Yassin today announced the extension of loan repayment moratorium by three months for those who have lost their jobs in 2020 due to the fallout from the COVID-19 pandemic and have yet to secure employment, while a targeted approach will be undertaken for the rest.
After the three months, the moratorium period could be extended by the respective banks according to individual situations, he said.
“This decision was made after discussing with the Finance Ministry and the Bank Negara Malaysia governor,” Muhyiddin said in the announcement telecast on RTM, Bernama TV, TV3 and Astro Awani.
The country's unemployment rate hit 5.3 per cent in May, affecting 826,100 people.
The government’s Wage Subsidy Programme has helped to safeguard 2.4 million jobs.
As of June 19, RM4.89 billion had been approved for 303,596 employers for the benefit of over 2.4 million workers.
The government also announced a six-month moratorium period from April 1 to Sept 30, 2020, under its PRIHATIN Rakyat Economic Stimulus Package to cushion the pandemic impact.
As of July 20, the deferred loan/financing repayments under the moratorium were estimated to have reached RM59 billion, benefiting some 7.7 million Malaysians or 93 per cent of individual borrowers.
Muhyiddin said for individuals who were still employed but whose salaries were affected or reduced due to COVID-19, their monthly instalment payments would be lowered in tandem with the salary reduction depending on the type of loan taken.
“For example, for housing or personal loans, the monthly instalments would be reduced at the same rate as the drop in salary. The assistance will be given for a period of at least six months and an extension may be given subject to the salary situation of the respective individuals,” Muhyiddin said.
In addition, banks have given their commitment to assist all individual borrowers or small and medium enterprises (SMEs) -- business operators, petty traders or the self-employed -- who are also affected by COVID-19.
Depending on the borrowers’ situation, the assistance being offered includes requiring only the payment of the interest for a prescribed period, extending the period of the overall repayment to reduce the amount of monthly payments, or giving other discharges until borrowers achieve a more stable financial footing.
For hire purchase loans, banks will also offer suitable payment rescheduling options subject to the Hire-Purchase Act 1967, such as extending the repayment period with a lower monthly instalment payment.
“These measures are expected to benefit 3 million individuals and SMEs. If there are more who need assistance, banking institutions have given their commitment to consider the appropriate assistance.
"Therefore, eligible borrowers can contact their banks to make an application starting Aug 7, 2020,” Muhyiddin said.