KUALA LUMPUR – Banks should be more open to risk-taking and give out more loans to small and medium enterprises (SMEs) to help them cope with the economic impact of the COVID-19 pandemic, said an analyst, reported Bernama.
Oh Ei Sun, a senior fellow of the Singapore-based Institute of International Affairs, said this is to prevent households from the middle 40% (M40) income group from slipping into the bottom 40% (B40) category as COVID-19 has affected the income of Malaysians.
“Loans from banks will enable (the M40 group) to do some sort of business instead of (letting them) slip down to the B40 level. Banks are actually making quite a lot of profits.
“At the same time, could they perhaps defer the loan payments a bit longer for the moratorium (to last) another half a year or so during these difficult times,” he said on Bernama TV’s Midday Update programme on June 22.
According to the Economic Action Council (EAC) secretariat, more than 600,000 households from the M40 income group have slipped into the bottom B40 category as the COVID-19 crisis has delivered a major blow to the incomes of Malaysians.
Oh hopes that the government could reduce or remove unnecessary regulations that make it difficult for the people to do business and sustain their livelihoods, noting that red tape is hindering people from doing business and being entrepreneurial.
“We in the midst of very difficult times right now, so it’s up to all of us, not only the government, to roll out various programmes and be more creative in utilising and learning new skills,” he said.
For example, he said Sabahans have shown more entrepreneurial characteristics (such as) setting up ‘social enterprises’ where businesses and local communities collaborate to make money.
“They make use of local materials, like bamboos or even Maggi instant noodles plastic wraps to turn them into useful bags and other items, which could then be sold,” he added.
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