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KOTA KINABALU: Bank Negara Malaysia (BNM) has been urged to look into the actual number of individuals facing financial problems brought about by Covid-19 and the subsequent Movement Control Orders (MCO).

The Sabah Employers Association (SEA) said the Conditional MCO (CMCO) being enforced in the state currently had only seen everyone living in fear not only of the coronavirus but also of their monthly loan repayments.

SEA president Yap Cheen Boon said Sabah had seen more draconian measures being adopted with 50 per cent reduction in its total workforce, compared to Peninsular Malaysia where businesses only need to reduce their office staff to 10 per cent and also it did not involve their operational personnel number.

"This has seen almost 800,000 workers staying at home, as a result dampening market demand, contraction of economic activity, living expenses drying up, bill and loan repayments," he said in a statement, here, today.

He added that the situation would also not get better until next year and as such was hopeful that BNM would extend the loan moratorium until the end of the year to ease the financial burden of both employees and employers in the state.

Although relevant industries had shown improvements, Yap nevertheless said employees and employers in the state were placed precariously due to weakened economies of trading nations and the slow recovery of the service sectors facing continuous Covid-19 threat.

"That is why (business) chambers, (commercial) associations and even employees union had been advocating for an extension of the loan moratorium at least until the end of 2020," he said.

He said that from the 640,000 borrowers having applied for repayment assistance and almost all their applications approved by their respective banks in various degree had raised more questions than answers to their financial predicament.

"Of the total pool of 8 million plus borrowers including individuals and Small and Medium-sized enterprises (SME) in the country, only 640,000, or 8 per cent had chosen to apply (for moratorium extension) beggars belief.

"BNM should dig in deeper and enquire on the data provided by banks - what had happened to the other 7 million borrowers; did everyone just manage to come up with the money, or their predicament was not captured in the record for one reason or the other," he said.

Yap, citing the 85 per cent repayment rate since October 1, said banks are diligently deducting installment amount from borrowers' accounts within the first week of October, when such funds are invariably being put aside for more critical purposes such as payment of overdue bills, food, and other expenses to stay afloat.

"SEA has seen cases where applications (for moratorium extension) are still under review, whilst payments had been deducted in early October, and with no decision forthcoming, another deduction is looming early November.

"It is not wrong to say that to allow deductions whilst applications are under review is self defeating, if not hypocritical in nature.

"This is downright demoralising, and imposes more pressure on individuals and businesses alike," Yap said.

Source: https://www.nst.com.my/news/nation/2020/10/634869/sabah-employers-call-extension-loan-moratorium