BANDAR SERI BEGAWAN – About 47 percent of loan deferment applications have been approved for businesses that sought financial aid due to the economic impact of COVID-19, according to data from the Brunei Darussalam Central Bank.

Seventy-seven businesses were allowed to temporarily stop principal payments of bank loans or financing, while another 81 applications are being assessed.

During a press conference on Saturday, Second Finance and Economy Minister YB Dato Seri Setia Dr Hj Mohd Amin Liew Abdullah said the central bank received 164 applications for loan deferment or restructuring in August.

Out of this number, five applications were rejected after failing to meet the criteria while one withdrew their application.

The central bank last month announced the extension of interim measures by the banking sector until December 31 to provide some relief to MSMEs and individuals affected by the COVID-19 outbreak.

To be eligible for the assistance, applicants must meet certain criteria which include MSMEs in targeted sectors such as tourism, hospitality, restaurants and cafes, air and water transport.

YB Dato Dr Hj Mohd Amin said approval of applications are subject to assessment of banks and financial institutions.

Banks look into factors such as the applicant’s risk profile as well as the bank’s own loan profile before making a decision, he said.

“For those who are not affected by COVID, if they want to take [advantage of] the opportunity, [their applications] will not be approved,” he added.

The minister said businesses that are affected by COVID-19 in all sectors can still apply to their banks for consideration.

“Even if it’s not [during] COVID, if the business or cash flow needs restructuring, they can approach the banks to consider, whether or not they can restructure as usual.

“We need to consider the position of the bank too. We can’t just take advantage. If the bank gives some facilities, it’s also at their expense and they also need to manage their cash flow,” he added.

A customer picks up her orders from a cube shop in Gadong Central. Photo: Rasidah Hj Abu bakar/The Scoop

‘Essential for businesses to stay open’

Responding to a question whether there are plans to allow only essential businesses to open with shorter operating hours in an effort to curb the spread of the coronavirus, the minister said the government is not classifying any businesses as essential and non-essential.

“At the moment we can’t really say which business is essential and non-essential. To the business owners, that’s their livelihood. It is essential for them to continue operating.

“The workers also need income. So it’s essential for them to continue operating as much as possible to continue to pay the salary of the workers. Whether the worker is essential or not depends on the business,” he continued.

YB Dato Dr Hj Mohd Amin said ordering all non-essential businesses to close would be equivalent to a hard lockdown that has economic implications.

“Businesses will close down and people will lose their jobs, they may not come back again after COVID-19.

“For some of these people, it’s not just a fight against COVID-19, it could put a lot of stress on them. If we continue to practise social distancing measures, it should be okay,” he said.

The government last month reinstated COVID-19 restrictions after detecting its first community cases in 15 months, including the closure of businesses such as gyms and fitness centres, cinemas, beauty salons and barber shops.