LANGKAWI – Financiers have been urged to take into account resilience and readiness to adopt digitalisation in their loan approval process.
Langkawi Business Association deputy president Datuk Alexander Issac told The Vibes that the process needs to go beyond valuing applicants’ assets, liabilities and debts.
“If we continue with the old ways of accessing our clients, we are going to be disconnected from the reality out there. This pandemic has caused untold damage not only to our healthcare system, but also to how we live and how we make a living.
“And, more debtors may fall into the non-performing loan category if banks and other financial institutions wish to recognise that tourism has been non-existent for at least 24 months.”
They should consider extending the loan tenure, and banks themselves should invest more in viable enterprises to ensure quicker returns on investment, he said.
He said enterprises listed in the tourism sector are on “life support”, and without financial aid, they will be forced to close permanently.
Using an analogy, he said: “It is cheaper to jump-start the battery (of a car) than to purchase an entirely new one.”
Alexander added: “The government needs to comprehend whether they want to revive an industry that is looking to collapse soon due to the lockdown, or one that can be salvaged and revived almost instantly when Covid-19 is contained.
“It is up to the authorities. One cannot blame the tourism operators if they fold.”
He reminded the authorities that tourism had been the No. 3 contributor to the national gross domestic product for two decades prior to the pandemic.
Langkawi Tourism Organisation chief Ahmad Pishol Isahak said the sector was already hurting before Covid-19 struck last year.
“To return to normalcy, we require all the help that the government can muster. Currently, there is room for both the public and private sectors to improve on aid. And of course, our financiers need to be innovative in wanting to help us.”
The criteria applied by banks for loan extensions are counterproductive, he said, adding that some businesses may have no choice but to turn to illegal moneylenders. – The Vibes, June 16, 2021
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