Malaysia Covid-19 BNM Measures to Assist Individuals, SMEs and Corporates Affected by COVID-19

BNM Measures to Assist Individuals, SMEs and Corporates Affected by COVID-19
Loan/Financing Deferment Measure

 

Borrowers, individuals and small and medium enterprises (

BNM Measures to Assist Individuals, SMEs and Corporates Affected by COVID-19
BNM’s Financing Facilities to Assist Malaysian SMEs

BNM’s Financing Facilities to Assist Malaysian SMEs>

https://www.bnm.gov.my/documents/2020/Additionalmeasures.20200327.appendix.pdf

The enhancements under the fund will entail firstly, an increase in the allocation of the Special Relief Facility (SRF) from RM2bil to RM5bil to provide relief assistance to more SMEs who are affected by the Covid-19 outbreak. The maximum financing rate is now lowered from 3.75% per annum to 3.5%. The enhanced SRF is available until Dec 31,2020.

BNM is enhancing the existing financing facilities under the BNM’s Fund for SMEs (the Fund), and increasing the allocation of the facilities by an additional RM4.0 billion to RM13.1 billion.

Special Relief Facility (SRF)

An increase in the allocation from RM2 billion to RM5 billion.

The maximum financing rate is lowered from 3.75% p.a. to 3.50% p.a.

The enhanced SRF is available until 31 December 2020.

All Economic Sectors (AES) Facility

An increase in the allocation from RM5.8 billion to RM6.8 billion.

The maximum financing rate is also reduced from 8% p.a. to 7% p.a.

 

Three additional financing facilities for SMEs

Automation and Digitalisation Facility (ADF) 

Agrofood Facility (AF)

Micro Enterprises Facility (MEF) 

 

Detailed features of the facilities under the Fund are attached.

Interested SMEs may call or email the participating financial institutions (PFIs) or visit the business financing referral platform at imsme.com.my, to apply for the financing.

The PFIs are commercial banks, Islamic banks and development financial institutions regulated by BNM.

 

SMEs can also avail themselves to Credit Guarantee Corporation Malaysia Berhad’s (CGC) BizMula-i and BizWanita-i schemes for financing of up to RM300,000.

Participating financial institutions can also seek guarantee coverage from CGC or Syarikat Jaminan Pembiayaan Perniagaan (SJPP) for these facilities.

The SRF, AF and ADF were announced as part of the first economic stimulus package on 27 February 2020.

Loan/Financing Deferment Measure 

BNM Measures to Assist Individuals, SMEs and Corporates Affected by COVID-19
Temporary Relief Measures for Insurance Policyholders and Takaful Participants

FAQs on Temporary Relief Measures for Insurance Policyholders and Takaful Participants >

https://www.bnm.gov.my/index.php?rp=en_covid19insurance

Bank Negara has extended relief measures to life insurance policyholders and family takaful participants.

They are now allowed to defer their regular payments without affecting their policy coverage. This offer will be available from 1 April to 31 December 2020.

​Life insurance and family takaful contributions

Life insurers and family takaful operators may extend this flexibility through a no-lapse guarantee, an extension of the grace period or any other means that maintain the policy/certificate intact during the deferment period. This offer will be available from 1 April to 31 December 2020.

 

In addition, life insurers and family takaful operators will also provide the following assistance to the affected policyholders and takaful participants until 31 December 2020:

  • Extend the period during which a policyholder and takaful participant can reinstate a policy/certificate that has lapsed

  • Provide options to enable policyholders and takaful participants to continue to meet their premium/contribution payments and maintain their policies/certificates. This may include changes in the sum assured/covered, adjustments to the premium/contribution structure and conversion into a paid-up policy.

  • Waive fees and charges imposed for changes made to policies/certificates

  • Waive any penalties/consequences for late payments of premiums/contributions, particularly where policyholders/takaful participants are unable to access electronic payment channels during the movement control order, which the government enforced on 18 March and scheduled to last until 14 April.

General insurance premiums and general takaful contributions

Flexibility to meet general insurance premiums and general takaful contributions

General insurers and general takaful operators will facilitate requests for flexibilities by affected policyholders and takaful participants to meet their premiums/contributions due during this period to ensure continued risk protection for their properties and businesses. This may include working with policyholders/takaful participants to restructure their policies/certificates so as to reduce the amount of premiums/ contributions payable.

Expedited claims processing

All insurers and takaful operators will expedite and facilitate claims processes related to COVID-19. Priority will be given to the issuance of guarantee letters, waivers of applicable waiting periods and processing of claims payments.

Policyholders and takaful participants are advised to contact their insurers and takaful operators to avail of these flexibilities provided to manage their policies and certificates.

Additional Regulatory and Supervisory Measures

The Bank will be reducing the interest rate (IRCC) and profit rate (PRCC) stress factor caps applied under the Risk-Based Capital Framework for Insurers and Risk-Based Capital Framework for Takaful Operators (Frameworks), respectively. The IRCC and PRCC caps will be reduced from 40% to 30% with effect from 31 March 2020, to better reflect the changes in the prevailing market conditions since the stress factors were first set in 2009.

In addition, the Bank will consider submissions from insurers and takaful operators to adopt alternative methodologies for calculating the interest rate and profit rate risk charges.

BNM Measures to Assist Individuals, SMEs and Corporates Affected by COVID-19
6-months Automatic Loan Repayment Deferment for Individuals and SMEs

BNM FAQs on Deferment Package and Conversion Package >

https://www.bnm.gov.my/documents/2020/FAQs_Additional%20Measures.pdf

Programme Brief

Assistance: Wage subsidy up to RM1,200 per worker for 3 months​
Income Group: Employees earning less than RM4,000 a month 
Target Group: Employees of companies experiencing a fall in income of more than 50% since Jan 01, 2020

  

Contacts

Ministry: Ministry of Finance 
Agency: Lembaga Hasil Dalam Negeri (LHDN)
Website: http://www.hasil.gov.my/index1.php?bt_lgv=2
Email: pre2020@treasury.gov.my

Telephone: 03-88829089 or 03-88829087

 

Web-links

Ministry of Finance Prihatin website >

List of Local Authorities by State >

Companies Commission of Malaysia (SSM) >

Loan/Financing Deferment Measure 

Bank Negara Malaysia (BNM) announced an automatic six months moratorium for all individual and SME loans effective from 1 April 2020. During the six months moratorium period, borrowers who meet the conditions do not need to make any repayment, and no late payment charges or penalties will be imposed.

Borrowers do not need to apply for the payment deferment. Those who meet the eligibility criteria will automatically qualify for the deferment.

(corporate borrowers/customers may request for amoratorium on loan/financing payment from their respective FIs.)

What type of loans qualify?

  • Borrowers, individuals and small and medium enterprises (SMEs) of conventional loans or Islamic financing repayment obligations (except credit cards).  

  • loans that are Malaysian Ringgit denominated

  • current performing loans that have not been in arrears for more than 90 days as at 1 April 2020

  • The deferment package is applicable to loans with scheduled or contractually due payments, including financing facilities that require scheduled interest/profit payments. 

  • Loans that are under the rescheduling and restructuring (R&R) and not in arrears more than 90 days as at 1 April 2020 are eligible for deferment.

  • Loans that are under AKPK’s Debt Management

  • Programme (DMP) are eligible for deferment. Borrowers are advised to contact AKPK to discuss the options that are available under the DMP.

Who does Not qualify?

  • Loans that are already in default, more than 90 days in arrears, do not qualify for the deferment.

  • Loans without scheduled or contractually due payments and financing facilities that do not have scheduled interest/profit payments. 

  • loans that are not denominated in Malaysian Ringgit.

Do borrowers need to apply?

Borrowers do not need to apply for the payment deferment. Those who meet the eligibility criteria will automatically qualify for the deferment.

However, if you do not wish to defer your loan repayment, you will need to respond to the notification sent by the FI and inform them that you wish to opt-out of the automatic deferment package. 

 

What do corporate borrowers need to do if they want to defer their loan repayment?

Corporate borrowers/customers should refer to their FIs for the deferment and rescheduling/restructuring of their
loans/financing. The criteria are subject to each FI’s internal credit policies and assessment.
In addition, these loans/financing must meet this criteria:

  • not in arrears exceeding 90 days as at 1 April 2020; and

  • denominated in Malaysian Ringgit.

How will the loan's interest during the six months be treated? 

Under the BNM guidelines, the deferred interest portion will be accrued and be charged interest during the six-month deferment.  However, the financial institutions have come forward to initiate not compounding interest of the deferred loan payments.  

BNM Measures to Assist Individuals, SMEs and Corporates Affected by COVID-19
Outstanding Credit Card Balances 

Outstanding Credit Card Balances To Be Converted To 13% p.a. Term Loans

 

Programme Brief

Assistance: Wage subsidy up to RM1,200 per worker for 3 months​
Income Group: Employees earning less than RM4,000 a month 
Target Group: Employees of companies experiencing a fall in income of more than 50% since Jan 01, 2020

  

Contacts

Ministry: Ministry of Finance 
Agency: Lembaga Hasil Dalam Negeri (LHDN)
Website: http://www.hasil.gov.my/index1.php?bt_lgv=2
Email: pre2020@treasury.gov.my

Telephone: 03-88829089 or 03-88829087

 

Web-links

Ministry of Finance Prihatin website >

List of Local Authorities by State >

Companies Commission of Malaysia (SSM) >

Banking institutions will provide automatic conversion of outstanding credit card facilities into a 3-year lower interest term loan to help borrowers better manage their debt.

All cardholders are eligible to participate in the conversion package regardless of their level of income.
For cardholders that have missed three consecutive months of
their minimum monthly payments, card issuers will automatically
convert the outstanding credit card balances of cardholders into
a term loan of up to three years in tenure.
Card issuers will also provide other cardholders with the option
to opt-in at any point from 1 April to 31 December 2020 to
convert their credit card balances into term loans at the same
tenure and rate as above.

The central bank noted that for outstanding credit card balances, banking institutions should offer borrowers the option to convert their credit card balances into a term financing of not more than three years and an effective interest rate of not more than 13% per annum.

“For individuals who have demonstrated signs of repayment difficulty, such as not meeting the minimum monthly repayment for the last three consecutive months, banking institutions shall automatically convert their credit card balances into term loans.

“These requirements shall be observed by banking institutions from April 1 until Dec 31, ” said Bank Negara, adding that banking institutions may choose to continue extending these options beyond Dec 31, in the interest of the borrowers.

Banks will convert outstanding credit card balances into 3-year term loans with a 13% p.a. interest rate to assist those who are in financial difficulty due to the Covid-19 outbreak. This step is one of the measures highlighted in Bank Negara Malaysia’s announcement regarding repayment deferment measures for households and SMEs.

Individuals who are unable to meet the minimum monthly repayment for 3 consecutive months will have their outstanding credit card balances automatically converted into term loans or financing. The term loan or financing will have a tenure of up to 3 years with an effective interest or profit rate of 13% p.a. and the cardholder can pay off the loan in fixed monthly instalments. You may still continue to use your credit card up to the remaining credit limit after taking into account the balance converted into the term loan.

The interest rate of 13% p.a. under this term loan is lower than the usual 15–18% p.a. that is usually charged on unpaid credit balances, and the monthly instalments make it easier for cardholders to manage their repayments. Moreover, cardholders who have converted their card balances into a term loan can then immediately ask for a 6-month deferment from their bank under the loan deferment measures announced by Bank Negara.

Following the directive by Bank Negara, banking institutions will be carrying out the automatic conversions for relevant cardholders during the period of 1 April 2020 until 31 December 2020. The banks may also choose to continue extending this option beyond 31 December 2020 in the interest of their customers.

BNM Measures to Assist Individuals, SMEs and Corporates Affected by COVID-19
BNM's Fund for SME's Financing Facilities

BNM’s Fund for SMEs:
Financing Facilities to Assist SMEs Affected by COVID-19
Frequently Asked Questions (FAQ) >

https://www.bnm.gov.my/index.php?rp=en_faqcovid19sme

Contacts

Location: Malaysia

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Assistance & Aid

 

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Assistance & Aid

BNM Measures to Assist Individuals, SMEs and Corporates Affected by COVID-19
Programme to Support the B40 Segment in Generating Sustainable Income and Achieve Financial Resilience (iTEKAD)

Programme to Support the B40 Segment in Generating Sustainable Income and Achieve Financial Resilience (iTEKAD) >

i-TEKAD is social finance programme to facilitate access to funding and help build entrepreneurship capability among B40 micro entrepreneurs.

This programme will be introduced by participating Islamic banks in collaboration with some State Islamic Religious Councils and implementation partners.

 

The programme will provide funding in the form of seed capital packaged with micro-financing for eligible micro-entrepreneurs to start and grow business.

BNM Measures to Assist Individuals, SMEs and Corporates Affected by COVID-19
BNM's Fund for SME's Financing Facilities

BNM’s Fund for SMEs:
Financing Facilities to Assist SMEs Affected by COVID-19
Frequently Asked Questions (FAQ) >

https://www.bnm.gov.my/index.php?rp=en_faqcovid19sme

The Covid-19 Government Prihatin Rakyat Economic Stimulus Package
(announced on March 27, 2020)

 

Ministry of Finance Prihatin Website >

https://pre2020.treasury.gov.my/en/

Summary

Prime Minister Tan Sri Muhyiddin Yassin announced a RM250 billion People-Centric Economic Stimulus package (Prihatin) which will benefit all segments of the society.

  • RM128 billion for the people’s welfare

  • RM100 billion to support businesses, including Small and Medium Enterprises (SMEs)

  • RM20 billion has been announced in the earlier stimulus package

Healthcare Aid

  • RM500 million allocation for the Health Ministry to ramp up its resources. 

  • RM1 billion will be allocated to the purchase of equipment and services to combat Covid-19

 

  • RM2 billion to strengthening the country's economy

  • RM10 billion cash aid for the lower-income B40 and middle-income M40 groups

RM20 billion has been announced in the earlier stimulus package

Announced on March 23.2020

  • RM130mil will be distributed equally to all states 

  • RM600mil for the Health Ministry for the purchase of equipment and to hire contract staff

  • Employees Provident Fund contributors aged below 55, can withdraw RM500 for up to 12 months.

Bantuan Perihation Nasional BPN FAQ

Source: The Star

BPN Programme Brief

Assistance: Up to RM1,600 cash-aid for individuals and households
Income Group: Monthly income less than RM8,000
  

Contacts

Ministry: Ministry of Finance 

Website: www.hasil.gov.my
Implementing Agency: Inland Revenue Board (LHDN)
Website: www.hasil.gov.my
Telephone: 1-800 882 747 or 03-8911 1000 9am to 5pm (Sunday to Friday)

Enquiries

Ministry of Finance

Telephone: 03-8882 9089/ 03-8882 9087/ 03-8882 9191/ 03-8882 4565/ 03-8882 4566 from 9am to 5pm (Sunday to Friday) 

Email: at bsh@treasury.gov.my/ pre2020@treasury.gov.my or Telegram application PRE Prihatin

Web-links

MoF Bantuan Prihatin Nasional FAQ >

Qualified recipients can check their status starting April 1, 2020 via:-

a) LHDN: http://www. hasil.gov.my

b) BSH: https://bsh.hasil.gov.my

c) Finance Ministry: https://www.treasury. gov.my

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