On March 25, 2020,6 months moratorium is given to all the loan except credit card and hire purchase to help provide some relief to individuals, small and medium-sized enterprises (SMEs) and corporations to manage the impact of the Covid-19 outbreak.
On the surface is sound nice but if one looks at the detail closely, it tells a different story. While you temporarily don't need to repay the loan, the interest will continue to accumulate until the end of the moratorium.
It seems like the bank is assuming business will be back to usual after this. What the bank fails to take into account is the wrong strategy use by the government has created a disaster that will make the 1997 financial crisis like nothing.
You can read it about Why the Malaysia stimulus package can't save jobs/business.
Link: https://read.cash/@hooiyewlim/why-malaysia-stimulus-package-cant-save-jobsbusiness-49d75bcc
The current business environment is different compared to 6 months ago, many people lose their job and wages get cut mean the number of money people can spare to pay back the loan will be reduced. The bank continues to collect interest while all this going on.
Once the moratorium period is over, the bank will soon have a lot of bad debt and should expect no bailout from the government since the government had already spent a lot of money on the stimulus package.
Should the government attempt to bail out the bank, I predict this will be the very thing that will cause our Malaysia interest rate to drop to zero.
If me, I will immediately reduce the loan interest to zero percent during the 6 months. The reason is very simple, do you play a game at home when your house in on fire? Of course no, you stop playing the game until the fire is put out. If not, you will die in the house.
Since losses is expected, I might as well write off some debt of those involved in essential service or production to lower down the cost of living so that the other debtor can clear their loan.
Sacrifice a few debts to save many debts.
As the Malaysia moratorium period ends, brace yourself Malaysian.
Interesting