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 National Recovery Council chairman 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 having even gone out of business.
"Even if financial institutions reintroduced another round of moratorium 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 driven 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 at Bukit Pasir here on Saturday (Sept 10).
Muyhiddin said the MPN had discussed the matter three times and had given its proposal to the government as among the ways the government could help micro-SMEs to strengthen their cash flow.
The move could be introduced in the coming Budget 2023, besides addressing some of the concerns caused by the recent increase in the overnight policy rate (OPR) by Bank Negara.
“We proposed that the government come up with a firm solution to hasten the economic recovery process and ease the rakyat’s burden.
“We hope Prime Minister Datuk Seri Ismail Sabri Yaakob, can find a way to help the people as the increase in OPR has put even more burden on them besides the weakening ringgit.
“Failure to do so will only make the announced budget unaccommodating to the needs of the people,” he added.
Last Thursday (Sept 8), Bank Negara increased the OPR by 25 basis points (bps) to 2.5%, in line with market expectations.
In a statement, it said it raised the ceiling and floor rate of the corridor of the OPR to 2.75% and 2.25%, respectively.
This is the central bank's third consecutive rate hike, bringing the total increase in the OPR to 75bps 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 National People’s Well-Being and Economic Recovery Package or Pemulih.
