Many SMEs and micro enterprises have reached a breaking point under the total lockdown and “have zero cash flow to sustain businesses”, says the Malaysian Employers Federation (MEF).
Its president Syed Hussain Syed Husman pointed out that it was only the second week since the total lockdown was implemented and already, these companies are struggling to survive. The lockdown may be extended for a further two weeks.
“MEF has received feedback from employers that the situation is no longer tenable. For many of them, it’s about survival because there is zero cash flow to keep operations alive,” said Syed Hussain.
MEF is now appealing for more help with loan moratoriums to cushion the impact on businesses and to reduce unemployment
He said banks should step forward to help and proposed that the scope of the moratorium under the latest Pemerkasa Plus stimulus package be expanded to include the M40 and all businesses.
“This should also cover all personal facilities including loans for overdrafts, mortgages, vehicles and credit cards.
“The moratorium should be automatically granted for six months until the end of the year at 0% interest,” he added.
He said MEF also wants banks to waive all interest and bank charges such as for rescheduling exercise and late interest payments.
Syed Hussain added that banks made a total profit of RM31.15 billion in 2020, and based on the first quarter report of 2021, all banks recorded higher profit compared to the same period in 2020.
“If banks come forward to assist businesses and individual borrowers during this challenging period, it would go a long way in helping and ensuring a smooth recovery of the economy,” he added.
Yesterday, SME Association of Malaysia vice-president Chin Chee Seong was reported as saying that at least 50,000 SMEs may be out of business should the lockdown last for another four weeks.
Chin further said that about 100,000 companies have ceased operations since the first MCO.
Those most affected were the retail and food and beverage sectors. About
down their businesses should the lockdown continue for the four weeks beyond June 14, Chin had further said.
The ongoing total lockdown is from June 1 to 14.
Source: SMEs and small businesses about to go bust, says MEF
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Many SMEs and small businesses about to go bust, should the total lockdown be extended, says MEF