KUALA LUMPUR, Sept 23 — More than 380,000 of the 1.4 million borrowers that spoke to banks in Malaysia said they would still need help with repaying their loans after the nationwide moratorium on loans expires on September 30, the local banking industry said.
In other words, only around 30 per cent of these borrowers took up the banks’ offer for help, while the majority of those contacted said they would be able to resume making repayments for their loans after September 30.
In a roundtable that included several bank CEOs, CIMB Bank CEO Datuk Abdul Rahman Ahmad highlighted the local banking industry’s commitment to helping Malaysian borrowers, with banks in Malaysia having contacted more than two million borrowers to date to offer loan repayment assistance.
“We have been calling them, sending them text messages, emailing them. Out of the two million we contacted, we managed to speak to 1.4 million, because 600,000 didn’t respond.
“Out of that 1.4 million, to date, roughly 380,000 have confirmed that they require loan repayment assistance. And the good news is that this shows again how proactive the banks are.
“Out of the 380,000, 98 per cent have been approved for loan repayment assistance. The percentage is very high, it shows that banks are completely aligned to help borrowers who have expressed that they need help. We approved 98 per cent of those that applied,” he told reporters today.
For the 380,000 that applied to the banks for help for their loan repayments, about 26,000 were small and medium enterprises (SMEs), while the remaining 354,000 were individual borrowers, he said.
As for the remaining one million-odd from the 1.4 million borrowers that local banks managed to get in touch with, Abdul Rahman said they fall into two categories, including those who indicated that they will be able to cope with loan installments.
“Now a big part of them say they don’t need help. Banks identified them, we think they need help, we call them, they say, ‘No, we are OK, we are actually able to resume our payments once the moratorium ends’.
“I think that’s a very good indicator of our economy. It shows a large part of our borrowers are able to resume payments,” he said, later adding: “A large number of them say they don’t need help, which I believe is a positive thing. That reflects the strength of the economy and that reflects the confidence of the borrowers — both SME and individual — that they can cope.”
As for the second category, these borrowers are still considering whether to apply for the loan repayment assistance offered by the banks.
The application process for loan repayment assistance from the banks is between one and five days for individuals, and between three days and two weeks for small and medium enterprises (SMEs).
Hong Leong Bank CEO Domenic Fuda said that the two million borrowers was the collective figure of those that banks in Malaysia thought may be vulnerable and need help with loan repayments based on the banks’ data analysis.
But he similarly noted that the majority or around 70 per cent of the 1.4 million that responded said they were able to cope with repayments, and pointed out that the percentage of SMEs who said they did not require help at over 80 per cent was actually higher than individual borrowers.
The outreach continues
The banks in Malaysia are going all out to ensure that borrowers who need help with restructuring or arranging for more flexible repayments for their loans would be able to apply for such aid before the end of the blanket loan moratorium on September 30, including opening their bank branches on weekends or with extended hours in the period leading up to September 30 and also through the banks’ online platforms.
At the same event, Bank Rakyat CEO Datuk Rosman Mohamed noted that some Malaysian borrowers may be wary of picking up phone calls as they fear it could be scams, but said his bank would continue to attempt to contact borrowers to offer aid.
Rosman said other efforts by Bank Rakyat include sending out text messages to borrowers, opening branches even on weekends, and putting up banners outside bank branches to alert customers of the availability of loan repayment assistance.
Bank Islam CEO Mohd Muazzam Mohamed meanwhile highlighted that banks have even asked for Islamic religious authorities’ help, such as having mosques in eight states and territories — Kuala Lumpur, Labuan, Putrajaya, Sarawak, Selangor, Penang, Perak and Negri Sembilan — deliver Friday sermons on financial management and also about the type of assistance available from banks for loan repayments.
“The approval rate is very high for those with genuine reasons — loss of employment and reduction of income,” he said when urging such borrowers to step forward to get help from banks to cope with existing loans.
When the loan moratorium that automatically applied to all borrowers end on September 30, borrowers will need to start making full loan repayments according to the original arrangements, unless they have applied to their banks for help such as making the loan period longer to reduce monthly instalments or seeking approval to only pay the loan interest for a certain period.
Those who have lost their jobs this year and have yet to find another can also apply to the banks for the moratorium on their loan repayments to be extended for three further months beyond September 30.
The bank CEOs at the event today however called on borrowers to approach their banks before September 30 to seek help on flexible loan payment arrangements, in order to avoid situations of late or overdue loan payments that could affect information on their credit worthiness.