Group: Cut red tape on loan approvals for SMEs for now

PETALING JAYA: A business association wants banks to cut red tape on loan approvals for small and medium enterprises (SMEs) during the movement control order (MCO) period.

SME Association of Malaysia president Datuk Michael Kang said if the MCO period was not extended past April 28, it would not be that bad.

“But if it’s extended again, then a lot of SMEs will have to start laying off their workers,” he said when contacted.

Kang said while he appreciated the government aid provided through the Prihatin stimulus package for SMEs, some banks had their own criteria of credit control for businesses.

He added that there should be a fairer mechanism in place during times of crisis.

“Since the government and Bank Negara are the ones that allocate the loans for SMEs, there is little to no risk.

“So, why does it take so long?” he said.

Kang also said the aid to be provided by the government was for SMEs to avoid turning to licensed moneylenders or even Ah Longs.

He pointed out that there was a need for licensed moneylenders to operate as a last resort for SMEs that desperately needed immediate financial support.

“It’s good that the International Trade and Industry Ministry has allowed certain small businesses to operate, at least partially, so that SMEs can start generating some cash and won’t need to apply for bank loans.

“We did a survey and about 70% of SMEs did not take loans from banks,” he said.

Kang added that the loans were not meant to turn businesses around, but only aimed to “cover expenditure”.

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