NOVEMBER 12 ― Many were hopeful on the financial Budget 2021, mainly on the moratorium. People were hoping that the moratorium would be extended to the B40 and M40, especially individuals facing difficulties in these challenging times. However, unfortunately, it did not happen. Although it is an enhancement for assistance to smoothen the process for B40, but will it be enough?
When the whole nation is begging for help and people seeking help on social media every other day, it has clearly shown the people need an extended moratorium more than ever. Hence why not change strategy, if the targeted moratorium has not been able to help people in need? So who are the government trying to protect, the bankers or people?
Based on the Budget, the banks now can leverage data based on the Bantuan Sara Hidup (BSH), and assistance will be provided if they belong to vulnerable segment groups such as the B40. Now that banks can identify the B40 customers, it will be easier for banks to apply the blanket moratorium since the data can verify the customer's segment. It should be given to all despite no job loss or income reduction because indirectly, all individuals are impacted by the pandemic.
Besides that, the targeted moratorium assistance for the B40 will still depend on the banks' discretion. The banks will still finalise if the individual has the right set of credit criteria to approve. What if an individual has been having cash flow trouble and the banks find this individual not fit to accept any assistance due to their repayment capability, will they be denied assistance? Will the poor be penalised for help just because they were poor and had trouble making payments back then? A blanket moratorium will solve this problem and include even customers with eligibility criteria. Recently, some bus operators complained they were denied assistance due to the condition of banks which they cannot fulfill.
The blanket moratorium can also help individuals who are not financially savvy. Based on the survey done by literacy platform Multiply, around 70 per cent of Malaysians need financial literacy support. Probably many are still unaware of the initiatives that they can apply and clueless on what should be done.
The SMEs are among the vulnerable segments during this pandemic, and it is more challenging for them due to the current economic demand. It is also harder for an individual to reopen a company once it is closed down and at the same time would need a lot of cash flow to keep surviving during this period. That is the dilemma the SME folks are experiencing. Nevertheless, the recent Budget will not help them much. since much of it is one-off, as a verse to banks loans which need to be serviced monthly by customers.
Based on the statistics by Bank Negara Malaysia (BNM), 70 per cent of customers have started to pay off their bank loans after the moratorium period ended in September. However, does this indicate that the customer is financially able to pay the loans? Based on a survey done, most individuals include housing loans as their basic needs, and there is a higher chance that a customer is paying bank debt by limiting other expenses such as food, children's education, savings, withdrawal from Employee Provident Fund (EPF), or allocations funds for elderly parents, etc. We should not assume that they are not having difficulties in making these payments.
The inequality between the poor and rich is very significant in Malaysia even before the pandemic, and imagine years to come. In this pandemic, the rich can save a large percentage of their income for their savings while the poor will have to borrow resources from along or family members. When the pandemic is over, they will be in more debt than they were at first. Nevertheless, what choice do they have?
Look at our neighbouring country Indonesia and their significant inequality disparity between rich and poor. Based on the World Bank report, only 20 per cent of Indonesia benefitted from the growing economy while 80 per cent or 250 million people were left behind. We should learn and not repeat the same mistakes. We should still strive for our Wawasan 2030 and it is still not too late for us. The decision is all in the government’s hands, will they choose to ease or burden the people?
* This is the personal opinion of the writer and does not necessarily represent the views of Malay Mail.