Warning of 'poverty clusters', NUBE calls for govt, banks to extend blanket loan moratorium

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KUALA LUMPUR (Oct 17): The National Union of Bank Employees (NUBE) is demanding urgent reinstatement of the blanket loan moratorium by a further two to three months across the country at least for the bottom 40% (B40) and middle 40% (M40) income groups as well as small and medium enterprises (SMEs).

In a statement today, its general-secretary J Solomon said thousands of lowly-paid workers had either lost their jobs or are clinging to it, making them unable to service their loans at this time.

“The failure to [extend the moratorium] will wreak havoc and create large clusters of families mired in poverty and unable to sustain themselves, as well as failed SMEs, all due to their inability to repay their loans as a result of the government’s and banks’ ignorance of their hardship.

“Sadly, these workers do not qualify for the targeted moratorium and are likely to default on their loans unless the government has a change of heart and hears their plea for help,” he said.

He also said the targeted moratorium by banks is not enough to help many of those who are suffering.

“The Ministry of Finance (MoF) and banks must stop giving the excuse that the current targeted moratorium, which comes with a slew of conditions, is adequate, claiming there isn’t any need to reinstate the blanket moratorium which expired at end-September,” he said.

Solomon said that based on feedback from NUBE members, many are struggling to pay their loans despite retaining their jobs.

“These are employees with family members who were either retrenched or had their salaries cut. Some of our members have also lost their part-time or weekend jobs due to the economy fallout,” he said.

He added that because of this, many members had been forced to look for buyers for their cars or remortgage their houses to settle their loans.

“They have no choice but take such desperate measures as they simply do not earn enough due to the economic hardship arising from the Covid-19 pandemic,” he said.

“Their situation has been made worse by the implementation of the CMCO (conditional movement control order) in Putrajaya, Kuala Lumpur, Selangor and Sabah as well partial lockdowns in certain areas,” he said.

Solomon also urged the government to commission a survey to gauge public sentiment on the blanket loan moratorium.

“NUBE is confident there would be widespread support for an extension as the Covid-19 economic fallout has adversely impacted the lives of all Malaysians, more so the lower-income groups and SMEs,” he said.

“The country’s gross domestic product (GDP) is expected to contract by more than 5% this year. This, by itself, should be enough reason for the government and banks to do all they can to protect the welfare of the lower-income groups,” he said.

He also urged for the moratorium to be extended until year end and subject to a review in 2021 if and when the economy picks up.

“The government must not wait for repercussions of the CMCO to take their toll on the millions of people who require help immediately. The slowdown of business activity, including at virtually empty shopping malls and other business premises, shows that employers and workers will be embroiled in more financial turmoil in the months ahead,” he said.

He said that banks would not suffer losses if the moratorium is extended as repayments would merely be delayed.

“An extension of the blanket moratorium for three months would not burden banks as it would only defer payments for loans of about RM6 billion, a fraction of the RM32 billion profit after tax banks are expected to have reaped in 2019,” he said.

“The RM6 billion would not be a loss incurred by banks, but merely a delay in collecting the amount from customers until the economy is on a better footing and the blanket moratorium is no longer needed,” he added.

Lam Jian Wyn