LETTER | I was appalled at the article yesterday whereby banks claim they are ready to help SMEs during the current crisis.

With Bank Negara offering the Special Relief Fund (SRF) of up to RM1 million per business, what are the banks are offering to their “customers”?

What the banks don’t say in any of their press releases or promotions is that they still require company directors to sign personal guarantees for 100 percent of the loan value.

This may seem a normal practice within Malaysia, but at the current time of crisis, how can the banks justify this when the government is guaranteeing 80 percent of the loan?

Yesterday I questioned my bank and was told:

a) Yes, the government is guaranteeing 80% of the loan, and 

b) Yes, directors have to sign personal guarantees to show commitment.

What mindset are the banks in? Do they seriously believe the SME business owners want to not repay loans and tarnish our names as being bankrupt?

The banks will actually be the cause of hundreds of SME businesses going into liquidation and hundreds of thousands, if not millions, of jobs being lost as a result of their total inflexibility in these abnormal times.

So with potential 100% director guarantees and with 80% government guarantees, the risk to the bank ... is yet again zero. The banks are using this time of crisis to maintain and enhance shareholder interest. In no way are they looking at national interests.

Having spoken to a very large number of industry contacts, not a single one of us is prepared to put our homes on the line to take up the SRF when we desperately need the funding that is on offer. 

If the banks are not prepared to take any risk at all, especially when they have government backing, then we are getting no help from anyone.

The banks need to get off their high horse, come down to reality and actually help.

After all, with 50% of SMEs forecast to go bust, the banks will have long-term losses in revenue anyway.

Now is the time to act, not talk and think you are making yourselves look good.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.