LETTER | Fomca calls on gov't to extend loan deferments to nine months

LETTER | When the housing and loan deferments for six months for consumers were announced in the early part of the movement control order (MCO), the Federation of Malaysian Consumers Associations (Fomca) fully supported the move by banks to help consumers reduce their financial burdens so that they could spend their monies on foods and other essentials.

This was further supported by most banks agreeing to defer the interest rates during the deferred period. This was in the first MCO period – the first 14 days.

The MCO has since been extended to 56 days and with the possibility that it may be extended even further. During this period, and with the ending of the MCO nowhere in sight, workers are losing their jobs, having their incomes reduced and facing a bleak economic recovery in the future.

The financial support from the government has been minimal, and many have to find their own way to meet essential expenses for themselves and their families. Daily wage earners and workers in the informal sector do not have access even to this limited aid. Furthermore, the distribution of food to the poor has been erratic and extremely limited.

Thus, many families are facing these crises with limited means as well as not having a clear picture of their employment future. The six-month deferment of their bank obligations was useful but certainly not sufficient.

Fomca calls on the government to extend the loan deferment from six months to at least nine months. This would enable the workers to hopefully get back into the job market with their current employers and those who lost their jobs with new employment.

For many families, there would be major financial readjustments, especially for those who had lost their jobs or had their incomes reduced. Worse still for those who have lost their jobs and they are unable to find new jobs.

Many consumers might even have to dig into their personal savings or borrow from informal sources to meet their basic expenses. These would probably come from the low-income and unskilled group. They would be facing tremendous pressures to meet their financial obligations.

This extension of the loan payments may hopefully be of some assistance to help consumers settle their employment issues and earn enough to resume their financial obligations to the banks.

At this time, when financial support to help many families facing distress is extremely limited or non-existent, it is a small way for the government to help these families.

The writer is president of the Federation of Malaysian Consumers' Associations (Fomca).

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.

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