Malaysia Bolsters Debt Resolution Support for SMEs

Source: Regulation Asia Editors, Regulation Asia 2020-08-20

From 1 September, SMEs can seek debt restructuring services, financial education and advisory from the Credit Counselling and Debt Management Agency, known as the AKPK.

BNM (Bank Negara Malaysia) has announced that from 1 September, AKPK (Credit Counselling and Debt Management Agency) will start offering specialised solutions to help SMEs to manage their debt and promote sound financial management practices.

The announcement follows the transfer of the SDRS (Small Debt Resolution Scheme) function from BMN to AKPK. The SDRS was established by BNM in 2003 as a way to facilitate the restructuring or rescheduling of loans, and avoid having to resort to legal recourse.

Since 2003, the SDRS has assisted more than 1,200 SMEs to reschedule and restructure their business financing amounting to MYR 1.7 billion.

“AKPK is well-positioned to take on this function given its vast experience and expertise in assisting financially distressed individuals manage their finances through its structured debt management programme,” BNM and AKPK said.

Since its inception in 2006, AKPK has provided counselling services to over 1 million individuals, of which over 320,000 participants have applied to enrol into its Debt Management Programme.

Moving forward, SMEs facing issues with loan repayments will also be able to approach AKPK for help under the SDRS. Applications are assessed objectively by a small debt resolution committee.

AKPK can provide efficient and holistic debt restructuring and advisory services particularly for SMEs that have loans with multiple banks. It also plays a key role in strengthening the financial capability of Malaysian nationals through tailored financial education and counselling programmes.

As the automatic debt moratorium is ending on 30 September, SMEs still facing difficulties to service their loan obligations should seek early advice on repayment assistance from their respective banks. The SDRS will serve as an additional avenue for SMEs to obtain help and advice on debt restructuring and rescheduling.

Malaysia Bolsters Debt Resolution Support for SMEs

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