BNM Provides Additional Details on Relief Measures Amid Pandemic
BNM provided additional details on the announced measures to households and businesses affected by COVID-19 pandemic. BNM announced additional financing facilities, enhancements to the targeted repayment assistance, and several other initiatives. The announcement involves the financing facilities that provide relief and support recovery for small and medium sized enterprises (SMEs) and these facilities include the Targeted Relief and Recovery Facility (TRRF), the High Tech Facility (HTF), and the Micro Enterprises Facility (MEF). The new TRRF will be open for applications from December 01, 2020 while more details on the HTF will be announced on December 01, 2020. Borrowers can continue to approach banks for tailored repayment assistance based on their specific financial circumstances, as all banks continue to stand ready to provide support to borrowers that need assistance.
Additional repayment assistance will be rolled out to certain borrowers who can request to either defer monthly instalments for 3 months; or reduce monthly instalments by 50% for six months. The assistance will be extended for facilities approved before October 01, 2020, which are not in arrears for more than 90 days at the time a borrower requests for repayment assistance. These borrowers who had previously received other forms of targeted repayment assistance and who wish to request for further assistance under the additional measures can still do so by contacting their banks. The additional repayment assistance will be available to eligible borrowers between November 23, 2020 and June 30, 2021. The repayment enhancement will be available for installments due December 2020 onward.
BNM has been working with the banking industry to finetune the delivery of targeted repayment assistance for borrowers whose household incomes have been reduced due to the pandemic. In addition to contacting banks, an additional avenue will be made available for micro-enterprises; they can now request for repayment assistance through a dedicated micro-business helpdesk. The virtual helpdesk provides free financial advice and facilitates applications for repayment assistance. In addition, the government, BNM and the financial industry are collaborating on several initiatives to further assist individuals and SMEs, including expansion of iTEKAD program. The program, launched in May 2020, combines social finance instruments such as zakat, sadaqah, and waqf with the provision of microfinancing, structured training, and mentorship. These instruments will empower micro-entrepreneurs to generate sustainable income and achieve financial resilience. In tandem with the increase in allocation to MEF, the iTEKAD program will be expanded with the participation of more Islamic banks.
Keywords: Asia Pacific, Malaysia, Banking, COVID-19, Credit Risk, SME, Loan Repayment, Targeted Repayment Assistance, Islamic Banks, BNM
Victor Calanog, Ph.D.
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