The six-month bank loan repayment moratorium introduced to buffer the impact of the COVID-19 pandemic, will be extended another three months for those who lost their jobs during the outbreak and is yet to get a new one.

Prime Minister Muhyiddin Yassin, in a televised address to the nation, said the decision was taken following a discussion with the finance minister and the governor of Bank Negara.

"For those who lost your jobs this year and is yet to get another job, you will enjoy a further three month's extension on your moratorium. After three months, it is up to the banks to decide whether to extend or end the scheme, based on the borrowers' financial condition.

"Secondly, those who are still employed, but has had their pay cut due to the COVID-19 outbreak, will have their instalment amount reduced in line with the reduction of their pay, depending on the type of loan taken," he said.

For example, housing loan and personal loan repayment amount will be pared down at the same rate as their income reduction. This assistance is valid for six months and further extension can be considered, based on the individual's income condition.

Business owners and the self employed will also benefit from the targeted moratorium extension, Muhyiddin added.

"Based on the situation of the borrowers, the types of assistance rendered include paying only the interest on a loan for a fixed time period, extending the tenure of a loan to reduce the monthly repayment amount, and other form of relief which would put the borrower in a better financial position."

Vehicle owners will also be given the chance to review their repayment schedule under the Hire Purchase Act, Muhyiddin said.

"These steps are expected to benefit 3 million individuals and businesses.

"If more are in need, financial institutions have committed to consider extending the necessary help. Borrowers who qualify for the aid can start contacting their respective banks from August 7 onwards."

According to Muhyiddin, the previously implemented moratorium scheme, which began on April 1 and was supposed to last until September 31, has benefited 7.7 million individual borrowers, or 93 percent of all borrowers, up until July 20, 2020. This involves a sum of RM38.3 billion.

"At the same time, 243,000 small and medium businesses (or 95 percent of all small business loan borrowers), gained from this moratorium worth RM20.7 billion," he said.

Many individuals and businesses who previously opted in for the moratorium when it was first implemented, also opted out by starting to repay their monthly loan repayments, since most economic sectors reopened for business under the Recovery Movement Control Order (RMCO), he said.

"The number of individuals (who started repaying) increased from 331,000 in April to 601,000 in July, 2020.

"For small and medium businesses, the number increased from 5,000 to 13,000 in the corresponding period," he said.

Before concluding his speech, the premier reminded Malaysians to take care of their health as "COVID-19 is still out there."

"Always practice social distancing, wear face masks, avoid crowded places, and don't feel weird practising the new normal."

Photo source: Astro Awani