Hari Raya Under Conditional Movement Control Order (CMCO): Guide on How to Prepare for Raya During COVID-19 Pandemic

  • By CompareHero.my
  • May 15, 2020

Hari Raya Aidilfitri 2020 during the Conditional Movement Control Order (CMCO) or (PKPB) will be one of the most memorable Raya celebrations in history, and we’re here to help you make the best out of it.

With Hari Raya Aidilfitri just a week away, Malaysians will be busy updating their Raya checklist and preparing for the festivities. But this year’s celebrations will be noticeably different due to the COVID-19 pandemic, completely altering our lives in the past two months.

Strict social distancing measures such as the Movement Control Order (MCO) have transformed the way we live, work, interact, and commemorate special occasions. Almost all large gatherings and festive celebrations have been put on hold, and the country’s Hari Raya holiday will be impacted as well. In the on-going sluggish economy caused by the pandemic, many Malaysians will also be going into Hari Raya with tighter budgets.

With the country still under a Conditional Movement Control Order (CMCO) until June 9, Malaysians will need to find new ways to continue to live normally and celebrate special occasions, whilst maintaining social distancing and strict hygiene habits. So to help ease your Hari Raya planning, we’ve listed down a few things you can do to prepare for a very CMCO Raya.

1. Prepare e-Duit Raya

This year, it’s best to avoid crowding at the bank for fresh stacks of Duit Raya. Instead, go cashless and contactless as part of the new normal. It’s safer and more rewarding too!

Just because you’re practicing social distancing, doesn’t mean you can’t give out Duit Raya. Near or far, you can send eDuit Raya to your family and friends via the Maybank2u Malaysia app. Just make sure the recipient’s mobile number is registered with MAE, or scan the QR code of your recipient with QRPay. The money will then be sent in a green virtual packet.

Maybank is also giving away a total of RM250,000 cash rewards to lucky e-Duit Raya senders. All you have to do is to send e-Duit Raya to as many people as you can throughout the festive season.

You can also transfer money via the Touch ‘n Go e-wallet and get guaranteed cashback rewards of up to RM300. You can send a minimum of RM5 using the “Transfer” function. However, they need to be unique (AKA made to different users) in order to be eligible for rewards.

Also read: Here’s 6 Ways To Spend Your Duit Raya

2. Prepare a Hari Raya checklist (and stick to it)

preparing-for-hari-raya

Keep to your Raya day goals by preparing a robust Raya checklist during this CMCO. It helps you stay organized, ensures you don’t miss out on any important items or steps, and generally empowers the checklist owner to be accountable for the tasks that need to be completed.

A simple checklist can be done with a paper and pen, or if you are more tech-savvy, just whip out the laptop and prepare one with Microsoft Excel.

Couple the checklist with a budget sheet to ensure that you don’t burst your Raya budget, especially for those with bad financial habits.

A simple checklist can consist of the following:

  1. Kitchen – Clean and declutter the fridge, and wipe those countertops till they are sparking clean.
  2. House – Get rid of dust bunnies by vacuuming the house thoroughly, and clean all fabrics at home such as curtains, carpets, and sofas.
  3. Raya goodies – Make sure Raya cookies are baked around two days in advance so that you’ll have enough time for other things.
  4. Family and friends – List down the names of family and friends you would like to send Raya cards, gifts, and wishes to. You definitely don’t want to forget anyone!
  5. Duit Raya – Allocate enough money for different members of the family, and prepare to do it digitally through e-wallets instead.
  6. Work – Time management is king. Plan your work around the holidays so you complete or space out your tasks. Enjoy the festivities with a peace of mind!
  7. Hygiene tools – Part of the new normal is to practice strict hygiene, so stock up on sufficient masks, sanitisers, and disinfectants when families come to visit within the CMCO guidelines.
  8. Must-have Raya food – Raya wouldn’t be the same without these festive staple on Raya morning: Beef or chicken Rendang, Sambal Sotong, Lemang, Lontong, Bubur Lambuk and Mee Rebus. Learn the recipe if you must!
  9. Music – The suasana Raya wouldn’t be complete without some of our favourite tunes, from the classics like Sudirman’s Balik Kampung to more contemporary melodies like M. Nasir’s Satu Hari Di Hari Raya. Not sure where to find an awesome playlist? We’ve got you covered. Check this out on Spotify.
  10. Stable virtual call setup – Check your wifi or data usage before Raya morning to avoid that annoying video call lag. Also experiment with different placements of your router or devices to get the best connection.
  11. Raya decorations and trinkets – Spice up that Raya feel with colourful fairy lights and permissible fireworks. Raya will feel dull without the extra buzz.
  12. Clothes –  Be on the lookout for new Raya clothes. Pick a colour theme and match it among family members. But stick to a reasonable budget, of course!

Speaking of budgets, the next point is just as important too.

3. Distinguish between your needs and wants

Many Malaysians will be going into Hari Raya with tighter cash flow due to the pandemic, so it’s advisable to stay away from big-money purchases to better manage your finances.

Focus on your needs than your wants. This Raya would be the perfect opportunity to break all forms of impulsive buying behaviour, including car-shopping.

Surprisingly, Malaysians love cars. According to a 2017 data by ASEANstats, Malaysia has the second highest car ownership ratio among Southeast Asian countries with 897 vehicles per 1,000 population. An anonymous employee from a local car reselling website also told us that they typically see a massive peak in car sales during the Raya season.

So, what to do if you see a new set of wheels that you admire? Well, put it on the back burner for now. With interstate movement to balik kampung banned until June 9, the usual Hari Raya house-hopping or long journey back to your kampung won’t be happening, so buying a new car may be optional.

However, it would be a good idea to prioritise your vehicle maintenance services so that you can have a safe and smooth journey when movements are no longer restricted.

4. Shop from the safety of your home

Due to worldwide quarantines and lockdowns, the pandemic has forced consumers across the globe to depend on e-commerce platforms for daily necessities and goods, resulting in a global growth of e-commerce sales.

Avoid overcrowding the malls, and simultaneously risking your life and those around you, by shopping online for Hari Raya. Many banks and e-commerce companies offer amazing online deals with their partner retailers, which makes for a safer, faster and more rewarding shopping experience. For example, you can get tons of essentials for as low as RM10 as part of Shopee’s Pesta Jualan Raya 48-hour non-stop sale (ends 15th May), which includes free shipping and storewide discounts.

To avoid missing out on any of these great deals, plan your Hari Raya shopping spree days in advance. You must take note on where the products come from. Many local sellers actually practice dropshipping (ordering in your item from their overseas supplier), and this will easily take the parcel weeks to get to your doorstep. To avoid this, use the “Shipped From: Local” filter or look for keywords like “Ready Stock” in your search.

Better yet, chat with sellers on the expected delivery date, especially because online delivery services are increasing due to the CMCO and rising Raya deliveries. Nothing is more disappointing than having that beautiful dulang arrive a week after the festivities are over.

And when shopping online, why not use your credit card and take advantage of these benefits and more?

Related: Ultimate Guide On Using Credit Cards Responsibly

online-shopping-at-home

  • Maximize your savings by getting up to 20% cashback when you pay your online purchases with Maybank QRPay or MAE.
  • Stand a chance to get a 22% discount on online deals when you spend a minimum spend of RM200 with your AmBank Debit Mastercard® or Credit Card/AmBank Islamic Credit Card-i.
  • Similarly, earn a 22% discount and cashback rewards when you spend with any BSN card at BSN’s merchant partners, which include Fashion Valet, Sephora and JD, among others.
  • CIMB’s #BazarSiberturahim offers awesome discounts from leading brands such as Dyson, Marks & Spencer, New Balance and more as well as cashback rewards of up to RM60,000 as part of their #BornToChillax campaign.
  • Lastly, get up to RM40 cashback every month till June 28 when you use the Touch ‘n Go e-wallet to shop online for Raya.

If you’re looking to save some cash while shopping in future, consider applying for a Standard Chartered digital credit card and get rewarded with an RM300 Shopee voucher. Some credit cards even reward you with exclusive gifts such as a Khind breadmaker, Sharp pressure cooker, and even a ViewSonic monitor screen. For more information on these promotions, click here.

5. Save extra cash for the needy

Though Ramadan would soon be over, continue to embody the spirit of the holy month by donating to charity or towards a cause that’s close to your heart. Supporting those in need not only helps preserve their livelihood, but also promotes self-gratitude and improves your own emotional wellbeing.

Donations need not necessarily be in the form of cash. Instead, volunteer your time at your local soup kitchen or treat the homeless to a meal or new clothes. (Don’t forget to apply social distancing practices.) Life can go by so quickly that we tend to forget the importance of showing gratitude or giving back to society.

In the Raya spirit of sharing and giving, consider donating extra cash to those who are affected by the COVID-19 pandemic, particularly the most vulnerable among us such as the B40 community.

  • Be part of Alliance Bank’s #SupportLokal initiative, which aims to help local businesses reach out to more customers online. Support these local brands by spending on their platforms.
  • You can also spread the Hari Raya joy to those less fortunate by making a donation via Maybank2u, which will be channeled to selected NGOs under MaybankHeart.

Local artist and singer Faizal Tahir is also encouraging netizens to buy local as a sign of solidarity with micro-entrepreneurs in these trying times.

6. Ensure social distancing and celebrate in smaller groups

Though Hari Raya celebrations will continue, social distancing measures are still in place during the festive season to maintain public safety and avoid unnecessarily crowded celebrations.

The Malaysian National Security Council has stated that home visitations for the upcoming Hari Raya, Kaamatan and Hari Gawai celebrations will be limited to 20 close family members, and on the first day of celebrations only. All family members are also required to follow the Standard Operating Procedures (SOPs) by using hand sanitizers, wearing face masks, and practising social distancing.

Though visitations are allowed within the same state, it’s advisable to refrain from visiting relatives and family members who are from vulnerable groups – those above the age of 65, have underlying health conditions, and pregnant mothers.

7. Get these tools to connect virtually this Hari Raya

Limited visitations this Raya has forced us to look into alternatives to connect. But don’t worry because software companies like Zoom, Microsoft, Google, and Skype among others have many video conferencing tools to choose from.

Through Google’s premium version, which also happens to be free until July 2020, you can make video calls with up to 150 participants. If that’s not enough, you can directly broadcast the call to up to 100,000 viewers.

Microsoft Teams, Zoom, and Skype are also other good options but differ in the number of participants, with 250, 100, and 50, respectively.

Weigh your options carefully, taking into account your situation and needs. Also weigh in real concerns associated with each platform, especially with issues of security, privacy, and “Zoombombing” (the practice of uninvited users crashing into conversations) coming to light in the news recently.

A tip we’ve learned on our own: test it out before the big day as the less tech-savvy members will find this a little challenging. (Nobody wants a whole 30-minutes of “Can you see me? Can you hear me?”) To ensure that your Raya virtual gathering has more fun than frustration, it wouldn’t be a bad idea to get everyone familiarised with the setup beforehand.

8. Avoid anything last minute

last-minute-hari-raya-preparations

Last minute spring cleaning, last minute shopping, last minute cooking, last minute outfit searching, and the list goes on.

Though you can expect a quieter Raya this year due to the CMCO, that doesn’t mean you should leave your Hari Raya preparations till the last minute.

Use your weekend prior to Raya to do some spring cleaning and give your house a minor makeover. Though you may not need new furniture, dishware or even curtains, consider adding some new decors to brighten up the festive mood.

There’s still plenty to clean in the house despite CMCO. Give your curtains a good wash or at least a minor wipe, scrub the bathrooms, throw out old food in the refrigerator, vacuum the house, and throw away clutter.

9. Brace yourselves for a contactless Raya

contactless-hari-raya

Without a doubt, this Hari Raya Aidifitri looks set to be a bittersweet, if not a sombre affair for many Muslims in the country, especially for those separated from loved ones who live in other states.

The reality of not being able to kiss their parents’ hands to seek forgiveness, a norm for Malaysian Muslims on the morning of Hari Raya, will hit them hard emotionally and mentally on Raya day itself. There might also not be any Raya feasting for those who live alone.

The situation may not be any better for families and relatives who live in the same state, as strict SOPs mean staying put at your own house is better to avoid any risk of infection to the vulnerable groups.

Muslims also face the prospect of not being able to congregate for the routine Raya prayers due to the CMCO measures. In his most recent address to the country, Malaysian Prime Minister Tun Sri Muhyiddin Yassin reminded the people, particularly Muslims who will celebrate Raya, of the Health Ministry’s advice to stay away from crowds and confined spaces, and maintain safe distancing when in conversation with guests.

Muslims in the country are still waiting for the official announcement of whether Friday prayers, tarawih and the obligatory five times a day prayers, and the Aidilfitri prayer, will be allowed at mosques.

Just remember… this too shall pass

The COVID-19 pandemic has caused a lot of stress and anxiety, and is now affecting the special festive occasions that we hold so dear to our hearts.

But despite the challenges that the pandemic has thrown at Malaysians – and the global population for that matter – we should keep our heads high and appreciate the many small blessings that are still bestowed upon us every day, like a roof over our heads, food on our table, and just simply: being able to live another day.

Besides, with Malaysia managing to contain the virus well, and even being described as exemplary in the battle against the coronavirus, there is plenty to be optimistic about.

Don’t be disheartened that your Raya won’t be the same this year, because eventually we will be reunited with our loved ones. Now, all Malaysians will need to do their part in containing COVID-19, for the sake of everyone’s safety. Have a great preparation for Raya ahead and stay safe!

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COVID-19 Survival Guide For Retail, F&B, And Service Industry: Bring Your Business Online

  • By CompareHero.my

COVID-19 Survival Guide For Malaysian Retail, F&B, and Service Industry: Learn How To Bring Your Business Online.

Since the breakout of the Covid-19 pandemic, many businesses have suffered, especially in the Retail Sector with businesses ranging from Food and Beverage (F&B) to the Services industry.

According to Retail Group Malaysia, the Malaysian retail industry is expected to reach a negative growth of 3.9% during the first quarter of 2020. In a joint statement, members of Malaysian retail associations have reported as much as a 50% drop in sales, with some expecting revenue to dip further too, as Malaysians continue to shy away from outdoor shopping activities.

While the traditional retail sector plunges, Ipsos Malaysia reports that almost half (48%) of Malaysians say they have increased online purchases during the pandemic, especially for food and grocery deliveries. Malaysians are particularly  buying personal care items, groceries, and clothes online, and this trend is likely to prolong even after the MCO is lifted.

With e-Commerce on the rise, here is a 5 Step Guide to help retail SMEs to survive and come out of this pandemic stronger.

Step 1: Setting Up A Crisis Management Taskforce & Managing Stakeholder Communications

SME retailers must plan and build a flexible crisis management team in order to steer and manage any response from all fronts. This will provide ample visibility for better decision-making and command-control throughout the business. The team should also craft the right message with constant updates to reassure their customers and suppliers on their next business action plans and more.

Step 2: Minimum-To-Survive Scenario Planning

SME retailers should consider scenario planning and resource projection for the first 1-2 months, 3 months, 6 months, and 12 months. These projections should factor in market demand, staff shortages, supply constraints, and cost management. Responding to the complex environment during the pandemic with the right and agile decision will increase the chance of the firm’s minimum survival.

Step 3: Adapt & Evolve Your Retail Store

SME retailers should assess each of their retail stores for local customer demands and competitors’ offerings. Adapt and evolve each storefront, from providing partial- to full-service, turning it into a back-end operation-only centre, setting up delivery or pick-up branch, and more. This will help maximise the use or resources to generate enough revenue for survival while trimming off cost-inefficient activities.

Step 4: Learn How SMEs Can Setup Their Own Online Webstore For FREE

CIMB Bank has teamed up with Shopmatic (an international E-commerce provider) to assist SMEs to bring their businesses online. The partnership seeks to assist the digitalisation of the business by bringing all the relevant pieces involved in setting up an E-commerce ecosystem into a single platform.

In a nutshell, this means that building the Website, Shopping Cart, Payment Gateway, Logistics Enablement, Digital Marketing, Email and Social Media Support are all integrated into one system. Therefore, this reduces the tediousness of setting up individual components. As a bonus, customers stand to gain from CIMB Bank’s expertise and regional networks, as this will come in handy whether it is a start-up or scaling-up of a business.

Since there has been an overwhelming interest to sell products and services online, the organizers have decided to provide a hands-on webinar to build an online Webstore. Participants will get expert advice on how to design a Webstore using the Shopmatic platform, enabling the features of the platform, and update your business and offering catalogues easily to generate more traffic and sales.

To further enhance, integrate, and manage your digital business, CIMB Bank and HReasily has launched BusinessHR.asia (a cloud-based all-in-one payroll and HR platform) which allows you to manage:

  1. Payroll – Integrate your payroll transactions seamlessly
  2. Leave Management – Online application & approval
  3. Mobile App – Manage your processes, anytime and anywhere
  4. Smart Check-In – Digital records of working hours, facial recognition, geolocation tagging
  5. Claims – Integration of expense claims with payroll reimbursement

Step 5: FREE (Shopmatic x BusinessHR.Asia Go Digital) Webinar to Help Boost Your New Online Webstore

  • 1st October 2020 (10.30AM – 12.00PM) click here to register
  • 8th October 2020 (10.30AM – 12.00PM) click here to register
  • 15th October 2020 (10.30AM – 12.00PM) click here to register
  • 29th October 2020 (10.30AM – 12.00PM) click here to register
  • 5th November 2020 (10.30AM – 12.00PM) click here to register
  • 12th November 2020 (10.30AM – 12.00PM) click here to register
  • 19th November 2020 (10.30AM – 12.00PM) click here to register
  • 26th November 2020 (10.30AM – 12.00PM) click here to register

 

The free webinar is for a limited time only (available for existing business owners and also CIMB Current Account users).

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COVID-19 Moratorium: Guide To Financial Relief Measures In Malaysia | Home Mortgage, Hire-Purchase, Personal Loan, PTPTN & Credit Cards

  • By CompareHero.my
  • May 6, 2020

By now, you’ve probably already heard of the moratorium on loan repayments announced by the government. From 1st April 2020 onwards, all banks will be offering postponement on loan and financing repayments over the coming 6 months.

In other words, you won’t need to make your monthly loan repayments anymore till the end of September this year. This is already taking place on an automatic basis, though you also have the choice to opt-out and make your repayments as usual by contacting your respective bank.

While this may come as a relief, it also brings with it many question:

  • Does the same apply for credit card bills?
  • Will interest still be charged as usual?
  • How about PTPTN?

Bank Negara Malaysia (BNM) has stated that all licensed banks and other financial institutions regulated by BNM are listed to provide this temporary financial relief. The establishment of a 6-month loan moratorium aims to provide some relief to individuals and businesses who face temporary financial constraints during this challenging period.

Update on moratorium for hire purchase loans and Islamic financing

As previously announced by BNM on April 30, interest/profit will continue to accrue on deferred payments during the moratorium period for hire purchase loans and fixed rate Islamic financing. The deferment package offered is meant to ease cash flows for those who are affected by the COVID-19 pandemic.

However, there is good news to borrowers! On May 6, The Ministry of Finance Malaysia has confirmed that hire purchase loans are now interest and compound free, including fixed rate Islamic financing. In other words, there will be no interest accrued and additional charges imposed throughout the 6-month moratorium period.

This means that starting in October, borrowers must resume their loan repayments as usual based on the terms of agreement with their respective banks. For more info, you may refer to your respective bank.

Check out our updated infographic below that digs down into how some of the different types of financing are affected:

COVID19_Moratorium_Guide_To_Financial_Relief_Measures_In_Malaysia_-_Infographic

Should you opt in or opt out of the loan deferment?

BNM’s deferment package is beneficial for individuals and businesses who are registered to any form of loans or financing plans. Only those eligible are recommended to proceed with the deferment as it can be a good measure to survive through this pandemic.

If you can afford to pay off your loan, you can save some money instead of having to spend more on deferred payment plans. If you’re still figuring out your decision, there are three possible options available, you can either:

1. Opt out and pay your monthly instalment

You will continue paying your monthly instalment as usual throughout the moratorium period. No additional interest payments will be charged.

2. Opt in and extend your loan tenure by 6 months

You can postpone the loan payback until September and extend your loan tenure for 6 months. This can be considered the best option if you’re currently controlling the flow of your money. You will need to start doing your monthly repayments as usual starting in October. Your monthly instalment will be the same till the end of your tenure.

Best example to illustrate this option: If you’re paying RM900 per month for your existing car loan, due to end by June 2021, you will continue to pay the same amount which is RM900 per month from October 2020 onwards until the end of your tenure, which has now been extended by 6 months to December 2021.

3. Opt in and pay the total deferred instalments, no extension on loan

You will not make any loan payments for 6 months, but once the moratorium is lifted, you have to pay the total deferred instalments including interest in one lump sum in October. The best part is that your loan tenure will not be extended.

Your option totally depends on the condition of your finances. You also have to take note that the options offered may differ from bank to bank, therefore you should contact your bank to discuss what is best for you.

If you did not opt out of the deferment earlier in April and wish to opt out now, banks will not impose any late payment charges. Your bank will provide you with a time frame to pay off the deferred instalments starting from April 1, 2020.

FULL INFOGRAPHIC TEXT:

What does “moratorium” mean?

A moratorium is a time period in which payback on loans can be suspended.

The government introduces loan moratorium as a relief for those who face temporary financial constraints due to the current pandemic.

How does moratorium work?

  • Automatic moratorium, no need to aply
  • Valid from April 1 – September 30, 2020 (6 months)
  • No late payment charges
  • Credit score will not be affected


What type of interest/profit rate applies?

Home LoanHire Purchase LoanPersonal LoanPTPTN
Reducing Balance RateFlat RateFlat RateFlat Rate / Reducing Balance Rate

Flat rate vs reducing balance rate

Flat rate: Flat rate interest/profit is charged based on the principal amount, which is the total initial sum borrowed. This is common for hire purchase, personal loans including Islamic financing. With flat rates, you pay a fixed amount of interest every month for the entire tenure – even though you’re consistently chipping away at your debt.

Reducing balance rate: Reducing balance rate interest is charged based on your outstanding balance only. This is typically used for home loans and credit cards. With reducing balance rates, the amount of interest you pay gets smaller and smaller every month because you’re slowly paying it off. Hence, you pay less interest overall compared to flat rates.

How to calculate the interest rate?

Flat rate: (Original loan amount x number of years x interest rate per annum) ÷ Number of instalments = The amount of interest you pay per instalment

Reducing balance rate: Interest rate per annum x Outstanding loan amount = The amount of interest you pay per Instalment

How does the moratorium affect mortgage home loans?

Interest for home loans (mortgages) is based on the reducing balance rate. This means that the interest you pay every month is based on the remaining balance from the previous month.

Interest will continue to pile up over this 6-month deferment period. Even though you don’t need to make your monthly repayments, you’ll still have to pay the interest accumulated over these 6 months in October. Therefore, your monthly instalment and total interest cost will increase after deferment. There will be no extension of tenure for home loan.

How does the moratorium affect hire purchase loans?

Interest will not accrue on deferred payments during the 6-month moratorium period. Hence, if you decide to opt-in to the moratorium and extend your loan tenure, there will be no additional charges imposed. The instalment payment will remain the same based on the term agreements you made with your bank.

Your loan tenure will only be the same if you pay the total deferred instalments in one lump sum in October.

How does the moratorium affect personal loans and Islamic financing?

Interest will not accrue during the 6-month deferment period for conventional personal loans. No additional interest will be charged to borrowers. Same goes to fixed rate Islamic financing, banks will not impose any additional profits and charges.

How does the moratorium affect your PTPTN repayment?

If you’re a PTPTN borrower, you’re either paying 3% interest on a reducing balance basis or 1% Ujrah on a flat rate basis.

All borrowers will automatically be given a delay in loan repayments until September 30, excluding borrowers who have already been in arrears prior to this. Admin and Ujrah fees are incurred during the moratorium period.

Moratorium loan eligibility requirements

  • The moratorium is applicable to all loans/financing denominated in Malaysian Ringgit
  • Must not in arrears for more than 90 days as of 1 April 2020


Does moratorium cover credit card payments?

Answer: Moratorium does not apply to credit cards. However, credit card balances can be converted into a term loan of up to 3 years of not more than 13% per annum.

How: Your unpaid balances will be converted into 36 monthly instalments of a lower interest rate, and you must pay the instalment in full every month once the deferment period ends. Accrual of interest still applies.

Eligibility: All cardholders regardless of their income level are eligible to participate in this conversion package any time from April 1 – December 31, 2020. Your account should not be in arrears for more than 90 days as of April 1, 2020.

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(UPDATED) COVID-19: Assistance and Special Relief Facility (SRF COVID-19) For Malaysia SMEs

  • By CompareHero.my
  • March 16, 2020

COVID-19 is an infectious disease caused by the most recently discovered coronavirus. This new virus and disease were unknown before the outbreak began in Wuhan, China, in December 2019. The virus has spread rapidly outside China to over 90 countries globally. In Malaysia, the first COVID-19 case was reported in mid of January 2020, since then ballooned to over 90 cases by early March 2020. Thus far, Bank Negara Malaysia (BNM) has announced a difficult economic outlook for the first quarter of 2020, and one of the main factors for this is due to the import and export slowdown.

Impact of COVID-19 On Malaysia SMEs

China is Malaysia’s largest export market, and a sharp drop would affect business across all sectors. COVID-19 has hampered resource movement, in and out of the country. This period is especially tough for Malaysia Small Medium Enterprises (SMEs) who are reliant on material supplies to-and-from the Chinese ports (accounting to 16% of all our exports and 19% of all our imports). The massive decline of Chinese tourists also impacted the hospitality and tourism business.

  • A dramatic 0.2% to 0.3% cut in Malaysia GDP as a result of the outbreak (February 2020, TheStar)
  • The ringgit depreciated by 1.3% against the US Dollar this year up to February 10, amid weaker sentiments in global financial markets (February 2020, BNM)
  • Malaysia economic growth hits decade low as coronavirus poses new risks. The Central Bank unexpectedly cut its overnight policy rate to 2.50 percent, the lowest since March 2011 (March 2020, BNM)

Experts estimate that it may take a while for the situation to recover and go back to normal. By the time the dust is settled, the global economy could have lost a significant amount in revenue.

Assistance For SMEs

However, it is not all doom and gloom as some banks have reached out to provide some respite to those who are affected. CIMB Bank and CIMB Islamic Bank are providing help to those who have been impacted by the outbreak, offering to restructure and reschedule financing provided to the customers of the bank.

CIMB Bank and CIMB Islamic Bank is opening doors to all affected customers to meet with their friendly advisors, to discuss and provide advice on their payment arrangements as each case will be given the due and necessary consideration.

Apart from that, CIMB’s assurance partners (Sun Life Malaysia Assurance, Sun Life Malaysia Takaful and Berjaya Sompo Insurance) have also come to the aid of those affected by the COVID-19 virus by extending the coverage of their respective existing policies.

Special Relief Facility COVID-19 (SRF COVID-19) For SMEs

To further assist businesses affected by the COVID-19 outbreak, BNM has allocated RM2 billion in total and the disbursement will be made via banks. Both CIMB Bank and CIMB Islamic Bank will be providing the Special Relief Facility COVID-19 (SRF COVID-19) for SMEs with maximum financing amount up to RM 1 million (per SME):

1. Financing Purpose: Working Capital only
2. Financing Rate: 3.5% p.a., inclusive of guarantee fees
3. Guarantee Coverage: Up to 80% CGC Guarantee
4. Facility Type: Term Loan or Term Financing
5. Maximum Tenure: 5.5 years, including 6 months moratorium on repayments
6. Availability Period: 6 March 2020 to 31 December 2020

(LATEST UPDATE)
In reference to Bank Negara Malaysia’s announcement on 30 March 2020, regarding the allocation of a RM5.0 billion Special Relief Facility/-i(SRF/-i) to assist SMEs affected by the recent COVID-19 outbreak, CIMB Bank and CIMB Islamic Bank wish to inform that the facility has been fully utilised and as such will no longer be offered.

SMEs that require further financial assistance may explore the following options:

  • You may call our Business Call Centre at 1300 888 828 (Local) or +603 2297 3000 (Overseas) or e-mail to mybusinesscare@cimb.com for more information on our financing products.
 
 
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2020 OPR Cuts: What Does This Mean For Malaysians? [UPDATED]

  • By CompareHero.my
  • January 22, 2020

Updated 22 Jan 2020.

The OPR is an overnight interest rate set by BNM. It is a rate a borrower bank has to pay to a leading bank for the funds borrowed. The OPR, in turn, has an effect on employment, economic growth and inflation. It is an indicator of the health of a country’s overall economy and banking system.

7 May 2019: Bank Negara cuts OPR rate to 3%

JUST IN! 7 May 2019: Bank Negara has cut the OPR rate to 3%! It is a drop of 25 basis points from 3.25% (a previous rate set on 25 January 2018)

The move to cut the rate to 3% is a response towards what looks like a weak economic outlook, with moderate economic activity in the first quarter of 2019. The lower rate is also to ease difficult financial situations.

MPC, Monetary Policy Committee, will continue to monitor the domestic growth and inflation in an effort to support price stability.

Information source: TheEdge Markets, Bank Negara OPR Decision & Statement

What is OPR?

The OPR is an overnight interest rate set by BNM. It is a rate a borrower bank has to pay to a leading bank for the funds borrowed. The OPR, in turn, has an effect on employment, economic growth and inflation. It is an indicator of the health of a country’s overall economy and banking system.

Most banks will lend out as much money as possible in terms of loans whilst maintaining the minimal cash required by Bank Negara. However, in the event that cash withdrawal exceeds the amount of cash available in the bank, the particular bank will then need to borrow cash from other banks, and make an interest rate, which is where OPR comes in. Increasing the OPR will immediately increase the cost of borrowing for banks, and thus, will lead to a chain effect.  OPR is also how Bank Negara regulates financial institutions and banks.

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Previous OPR change: Increase by Bank Negara Malaysia on 25 Jan 2018

On 25 January 2018, Bank Negara Malaysia increased the Overnight Policy Rate (OPR) by 25 points to 3.25%. Find out why, and how the OPR increase would affect you below.

This is the first OPR hike to happen since July 10, 2014. As a quick recap, BNM has maintained the OPR at 3% since July 2016 which was the last time any changes were made to the OPR.

“With the economy firmly on a steady growth path, the MPC decided to normalise the degree of monetary accommodation. At the same time, the MPC recognises the need to pre-emptively ensure that the stance of monetary policy is appropriate to prevent the build-up of risks that could arise from interest rates being too low for a prolonged period of time. At the current level of the OPR, the stance of monetary policy remains accommodative.” – Monetary Policy Statement

Previously, BNM maintained the OPR at 3% during its last Monetary Policy Committee (MPC) meeting on 9 November 2017. However, the MPC also released a statement which said that it “may consider reviewing the current degree of monetary accommodation” given the strength of the global and domestic macroeconomic conditions. This then spurred talks that the OPR may increase.

In the same statement, BNM said the standpoint of monetary policy remains accommodative at the current level. Monetary policy is the macroeconomic policy laid down by a central bank. This involves management of money supply and also interest rate. It can also be defined as the demand side economic policy that is used by the government of a country to achieve objectives like inflation, consumption, growth and liquidity.

But before we delve into details of why there could be an OPR increase and what the increase could mean for Malaysian consumers, let’s first understand what OPR is.

Why Would Bank Negara Raise (or Reduce) OPR?

In July of 2016, BNM announced the reduction of OPR, which was a first reduction to happen in 7 years. The OPR reduction happened in light of the risks that were rising from Britain’s withdrawal from the European Union (EU) that was also known as Brexit.

BNM then decided to reduce the OPR due to uncertainties in the global environment which could also negatively impact Malaysia’s growth prospects. Central banks also tend to increase interest rates to tackle inflation based on the scenario that growth is too strong and on fears that there could be asset imbalance in the system.

When the interest rate is too low for too long, the cost to get funding is cheaper and as such, people may tend to over-borrow or a systemic slowdown can happen which then puts the economy in bad shape. However, an increase of the OPR will lead to an increase in loan interest rates. This will mean higher costs of borrowing, which can then also curb the accumulation of personal and household debts.

Therefore, the rise and decrease of OPR can also be as a form to manage the country’s economy and also to manage the country’s monetary situation.

It was also reported that Bank Negara is of the opinion that Malaysia’s economy has become more firm, with both the domestic and external sectors registering strong performance. The country’s gross domestic product (GDP) growth is estimated at 5.2% to 5.7% in 2017 and estimated to be 5% to 5.5% in 2018. Therefore, the reason behind plans to increase the OPR may also be as a result of Malaysia’s economy growth.  Whilst Affin Hwang believes the rationale for increasing the OPR is to prevent the economy from exceeding its potential output level, which could then translate into higher inflationary pressure.

What Does An OPR Increase (or Decrease) Mean For Malaysians?

A rise in OPR would mean that banks will increase the base lending rate (BLR) and base financing rate (BFR) because a rise would directly influence both. BLR is the rate that is determined by conventional banks based on the cost of lending to consumers. While BFR is a rate determined by Islamic banks based on the cost of lending to consumers.

Therefore the rise of OPR will result in higher interest rate or profit rate for loans that are tagged to BLR or BFR.

For example: Assuming that a loan has a BLR at 6.60%.  A 0.25% hike in OPR will then increase BLR from 6.60% to 6.85%.

As a result of this, taking on a loan after the OPR increase will cost more for Malaysian consumers because of the increase in the loan interest rate. So buying a car will then cost more, and servicing an existing housing loan may also cost more as the interest rate has gone up.

However, it won’t just be all doom and gloom for Malaysians if the OPR increases. Loan interest increasing would then also mean that fixed deposit interests, saving account interests, amongst others, will increase in tandem too. Therefore if you have substantial saving, an increase in the increase rate will help Malaysians get more from their saving. A decrease, on the other hand, would see lowered costs for borrowing, but also a decrease in fixed deposit interests and saving account interests.

Ultimately consumers will benefit from knowing the OPR, irrespective of whether they are a borrower or depositor. As a borrower, when the interest rate goes up, you will have to pay more in terms of instalment. Or else, your loan tenure will increase if you don’t want to increase your current instalment payment amount. But if you’re a depositor, you will get to enjoy better interest rates on your savings as a result of the OPR increase, and vice versa.

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