Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz has announced that the government will NOT extend the moratorium period for bank loan payments after September. This is very worrying because many parties including business associations and trade unions have applied for this moratorium period to be extended for another 6 months.
The reason given is because most businesses and enterprises are already in operation and most borrowers, whether companies or individuals, are already able to repay their loans. Those who still need help to repay their loan have been advised to discuss it with the bank.
This isn’t the actual case. Although many businesses and enterprises have started operating, weak economic conditions continue to result in restricted or unstable which inhibits normal loan repayment. Sectors such as services, aviation, tourism and hospitality are still severely affected by the Covid-19 crisis.
As reported, the unemployment rate is rising. This not only shows that businesses and enterprises are not recovering as has been implied by the Finance Minister. Instead business owners have had to shrink business and reduce costs by retrenching employees.
Young people are the most affected
My sympathies especially lie with young people who have families. Those who are just starting a family, living in the city, have higher financial obligations than their income but due to the Covid-19 economic crisis.
Young people are the most vulnerable to unemployment. This is evident where in April when the national unemployment rate rose to 5.0 percent from 3.9 percent in March, the rate for young people aged 15 to 30 rose from 7.8 percent to 9.0 percent.
Data from the Employment Insurance System by SOCSO also states that the most affected are young people, with 6 percent of job losses among employees aged 40 and under. Of the group, 29 percent were 30 years old and under.
When the moratorium of bank loan payments was introduced, household monthly expenses decreased by up to 50 percent. Although there are young people who are not affected in terms of employment and income during the PKP period, they also take this moratorium so that any savings can be saved for the emergency fund in case the economic situation worsens or if they lose their source of income in the future.
To young people who have lost their jobs and lost their income, this moratorium is certainly very helpful for them. With the still challenging economic situation and the increasing number of 800,000 unemployed people, the majority of whom are of course young people will certainly not be able to return to work as early as this September.
Don’t allow the youth to become victims
I suggest that if the government cannot extend the moratorium, perhaps it can act as a middleman for a moratorium program with the bank, for the benefit of the needy such as young people with families who have lost their income.
Allowing those who need a moratorium extension to deal with the bank will inevitably involve more restrictions imposed by said banks. Of course, the immediate effect is the occurrence of incidents such as their cars and houses being reposed and confiscated by the bank. What is more worrying is the social impact on these groups and their families due to these financial constraints.
Edry Faizal Eddy Yusof
ADUN for Dusun Tua and DAPSY National Executive Council Member