KOTA KINABALU – Only about 20% of applications for loan schemes under the Sabah Credit Corporation (SCC) to help Sabahans and local small and medium enterprises (SMEs) affected by the Covid-19 movement restrictions have been approved since June.
DAP’s Luyang assemblyman Phoong Jin Zhe said 1,958 people have applied for the micro-credit scheme while 79 people applied for the SME loan scheme.
“However, the approval rate is extraordinarily low, with the micro-credit scheme approval rate at 4.37% and SME loans at 30.60%,” he said in revealing a written reply from Sabah Chief Minister Datuk Seri Hajiji Noor to his question at the State Assembly.
The Sabah government has channelled RM90 million to SCC to assist hard-hit SMEs, with RM40 million allocated for the micro-credit scheme and RM50 million in loans for SMEs.
The micro-credit scheme provides a loan of between RM300 to RM2,000 at an interest rate of 0%.
The scheme for SMEs provides loans of up to RM1.5 million with an interest rate of 3.5%.
"The common reasons for applications being rejected are because they did not meet certain criteria – which are very strict – the business does not fall under the SME category or the company is not affected by the movement control order," Hajiji said in the written reply.
In light of such a low approval rate by the SCC, Phoong said the state government should revise the lending mechanism and loosen the terms and conditions so that SMEs can overcome the hardship brought about by Covid-19.
Phoong also urged the state to continue pressuring the federal government to extend the loan moratorium for individuals and SMEs in Sabah.
"The government should take immediate action to assist SMEs, which make up 98% of Sabah's economy.
“With Sabah being the most affected state by the Covid-19 outbreak, the state government should convey the bipartisan consensus to the federal government for loan moratoriums to be extended." – The Vibes, November 23, 2020
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