KUALA LUMPUR, March 30 ― The small and medium enterprises (SMEs) loans under the repayment assistance remained high at 36.5 per cent of total SME loans in December 2021 or 5.7 per cent of total loans from banks and development financial institutions but moderated from its peak in July 2021.

Bank Negara Malaysia (BNM) said the share of SMEs that rolled over their repayment assistance with banks also edged higher towards the end of 2021 driven by SMEs in the hotels, wholesale and retail trade, and transport and storage sectors that experienced a slower recovery.

"New rescheduling and restructuring (R&R) applications by SMEs have, however, moderated significantly from its peak in July 2021, indicating greater confidence among SMEs of their ability to service their debt,” the central bank said in its Financial Stability Review Second Half 2021 release here today.

It said repayment assistance and other measures by financial institutions, the government and the bank, including flood relief programmes, have also contained any notable increase in defaults among SMEs.

Nevertheless, it said SMEs in sectors most affected by the pandemic are closely monitored by banks as support measures are progressively unwound.

It said a sustained economic recovery would mitigate credit losses from banks exposures to SMEs.

"For SMEs that continue to face difficulty servicing their loans, enhancements to debt workout mechanisms for SMEs under the Credit Counselling and Debt Management Agency (AKPK) could help avert large-scale insolvencies,” it added. ― Bernama