Banks in Malaysia are Southeast Asia’s most committed financial institutions in terms of helping businesses as well as individuals during the COVID-19 pandemic, with up to 55 per cent of the total loan book in the country under moratorium support, a fund manager said.

BNP Paribas Asset Management Malaysia Sdn Bhd chief executive officer (CEO) and country head Angelia Chin-Sharpe said compared with regional peers, moratorium support offered by Thailand’s banks only covered 33 per cent of the country’s total loan book, followed by the Philippines (22 per cent), Indonesia (16 per cent), India (11 per cent) and Singapore (10 per cent).

“The moratorium really helps small and medium-sized enterprises (SMEs) and those with personal loans to tide through the challenging environment,” she said.

Chin-Sharpe said this during “The Impact of COVID-19 on the Financial Sector” webinar today.

In March, the Malaysian government announced that banking institutions would provide an automatic deferment of all loan or financing repayments for six months, from April 1-Sept 30, 2020, to ease the financial burden faced by SMEs as well as individual consumers.

Subsequently, in July, Prime Minister Tan Sri Muhyiddin Yassin announced a targeted moratorium extension for three months for those who had lost their jobs in 2020 due to the impact from the COVID-19 pandemic and remained jobless.

After three months, the moratorium could be extended further at the banks’ discretion, on a case-by-case basis.

Meanwhile, Chin-Sharpe believed that good governance plays a vital role in ensuring the financial segment’s sustainability.

“We are going to see banks or financial institutions with high asset quality outperforming the rest, be it globally, regionally, or locally, while banks with lower asset quality will take some time to recover from the pandemic,” she said.

She added that digitalisation of the banking industry will be the way forward for banks as businesses have changed their behaviour amidst the COVID-19 crisis.

Meanwhile, DVA Consulting Sdn Bhd managing director Daud Vicary Abdullah said local SMEs have been at the forefront in terms of creative thinking and innovation during the COVID-19 pandemic.

“Creative thinking and innovations are coming from them, not from the big guys,” he said.

Moving forward, he believed that SMEs that have adopted the technology to conduct their businesses online will continue to drive the country’s economic growth, moving forward.

The former president and CEO of the International Centre for Education in Islamic Finance also praised Malaysia for the way it responded to the COVID-19 outbreak, particularly during the first phase of the Movement Control Order that started on March 18.

“Malaysia’s government has been taking independent and professional advice (to tackle the COVID-19 crisis) rather than looking at the political side,” he added.