Micro-SMEs need another round of moratoriums to recover, says Muhyiddin


PAGOH: Financial institutions should consider another round of special moratoriums to give micro-SMEs more time to recover their financial flow, says Tan Sri Muhyiddin Yassin.

The chairman of the National Recovery Council said some of the businesses were still struggling to get back on their feet after suffering losses of between 30% and 40% during the Covid-19 pandemic, with some even going out of business.

“Even if financial institutions reintroduced a new round of moratoriums to give our micro-SMEs a chance to regain momentum, they would not suffer significant losses.

“Nearly 96% of the country’s economic activities are carried out by micro-SMEs. So if they fail to create a competitive market, the economic recovery will be slow and halted by the rising cost of inflation,” he said after attending the Jualan Prihatin Rakyat in Bukit Pasir here on Saturday. September 10.

Muyhiddin said MPN had discussed the issue three times and shared their proposal with the government among the ways the government could help micro-SMEs to strengthen their cash flow.

This decision could be introduced in the next 2023 budget, in addition to addressing some of the concerns raised by the recent increase in the overnight rate (OPR) by Bank Negara.

“We proposed that the government find a firm solution to speed up the process of economic recovery and ease the burden on the rakyat.

“We hope Prime Minister Datuk Seri Ismail Sabri Yaakob can find a way to help people, as the increase in OPR has placed even more burden on them on top of the weakening ringgit.

“Failure to do so will only make the announced budget unsuited to the needs of the people,” he added.

Last Thursday (8 September), Bank Negara increased the OPR by 25 basis points (bp) to 2.5%, in line with market expectations.

In a press release, it indicates that it has raised the ceiling and floor rate of the OPR corridor to 2.75% and 2.25% respectively.

It is the central bank’s third consecutive rate hike, bringing the total RPO increase to 75 basis points so far this year.

Bank Negara had introduced a six-month moratorium for all individuals and micro-SMEs in July last year, in line with the People’s National Welfare and Economic Recovery Program or Pemulih.

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