ABM tells SMES to seek advice from banks before moratorium ends

KUALA LUMPUR: The Association of Banks in Malaysia (ABM) has urged small and medium enterprises (SMES) and those who are facing difficulties in repaying their loans once the moratorium ends to start discussions with, and to seek advice from their banks now. The moratorium ends on Sept 30.

Its representative Mohd Zaini Aris said borrowers must plan a viable loan repayment strategy to ease their burden of obligation.

“Borrowers must be prepared in terms of financial and mental obligation and must not wait to seek advice from their banks.

“If they are not prepared, they might face difficulty in preparing the documentation (needed) to discuss with banks as this takes time,” he said during a webinar themed “Rescheduling and Restructuring (R&R) of Loans” organised by Bank Negara yesterday.

Mohd Zaini, who is also Malayan Banking Bhd (Maybank) head of consumer finance, said the purpose of loan rescheduling and restructuring is to help borrowers continue with their businesses.

“Banks will try to help if the track record is good and the business is still running. As long as there is no legal action involved, ” he said.

He brushed aside public perceptions that it is difficult to get new loans once one undertakes a loan rescheduling.

He said the process would not affect performing loans.

For non-performing loans, once the loans were restructured, a sixmonth observation period would be applied before the Central Credit Reference Information System (CCRIS) was untagged.

“Borrowers should not fear to discuss with their banks. They must look to the long term. Even if rescheduling is rejected, we still have many ways to help customers. We will look into it on a case-by-case basis. Come and talk to us as we could advise the best way to manage your cash flow so that you could plan the best way to move forward,” he said.

Meanwhile, the Association of Bumiputra Women in Business and Profession (Peniagawati) president Datuk Azlin Ahmad Shaharbi said many micro entrepreneurs and SMES were affected by the Movement Control Order (MCO).

She said the staggered opening of the various types of businesses had made it difficult for entrepreneurs to apply for loan rescheduling and restructuring and to put their case forward.

To succeed in this restructuring process, sustainability and cash flow are important issues. But these are the very issues that entrepreneurs are unable to answer. — Bernama