Lawmaker calls for debt extension for closed SMEs

A lawmaker has called for an extension to loan repayment periods and decreases for each repayment installment for small and medium enterprises (SMEs) which have shutdown.

Lawmaker Lei Leong Wong made these suggestions in a recent written reply to the government. He recommended that the government graciously extend repayment periods and reduce installment amounts for SMEs which closed during the Covid-19 pandemic but still have outstanding debts from the government’s business stimulus schemes.

The lawmaker pointed to the terms and conditions of the pandemic business stimulus scheme, which state that closed SMEs must clear their debts within 30 days of ceasing business. However, as per actual conditions, the government is vested with the power to extend this period to 90 days.

The government had earlier disclosed that 181 SME beneficiaries have already shutdown, and the lawmaker urged the government to reveal which industries were affected.

The information is important because, as Lei emphasized, 90% of local enterprises are SMEs, which provide jobs to 40% of the local workforce. “They are not only the city’s economic cornerstone, but also a crucial employment market,” the lawmaker said in his enquiry.

He also asked whether the government would implement other policies to provide more targeted and helpful support to SMEs, building on the foundation of the eight stimulus measures last year.

Lei also argued that if the government made plans to improve loan repayment measures for SMEs, both business and employment markets will be more stable.

In addition, he reminded the government that the measures affect not only business operators, but also employees of SMEs and their families, as the Covid-19 pandemic extends its impact on SMEs.

Furthermore, he emphasized that many SMEs have been faced with “massive economic stresses” from a plunge in income despite unchanged costs for rent, salaries and loan repayments.

The lawmaker revealed that several former and current business operators have complained to him that, due to restrictions of the scheme, their lives have not improved even after cutting their losses by closing their businesses, because they needed to source funds for lump sum repayment of loans obtained from the government.

He also reminded the government to be “continuously concerned with operating conditions of SMEs and employment of local people, so as to [promptly] implement policies and supportive measures to ensure […] stability.”