Culminating from the recommendations of the National SME Steering Committee, the Government took a landmark decision in June 2004 to establish the National SME Development Council. The Council, chaired by the Prime Minister and supported by Bank Negara Malaysia as the Secretariat, provides policy direction for the programmes to support the development of SMEs, and to ensure the effective coordination and implementation of these programmes. Currently, members of the Council comprise of the Prime Minister, 15 Ministers and four Heads of Agencies, that are involved in SME development. Since the establishment of the Council in 2004, the national SME strategy has focused on the development of high performing and resilient SMEs by capacity building and providing an enabling environment for the SMEs. The measures undertaken have been clustered under three broad strategic thrusts, namely, strengthening the enabling infrastructure; enhancing the capacity and capability of SMEs; and enhancing access to financing. The basic principle adopted has been to help SMEs to help themselves. An annual SME Blueprint Management Framework has been implemented to ensure more focused, holistic and effective SME development programmes with greater collaboration between the Ministries and Agencies involved. In 2007, more than 286,000 SMEs received assistance through the implementation of 189 key development programmes, involving  2  BIS Review 90/2008  expenditure of RM4.9 billion. For 2008, 198 key programmes are being implemented, involving an expenditure of RM3.2 billion.

We have also seen a paradigm shift in the approach by financial institutions in the business of SME financing. Increasingly, banks have introduced strategies for interfacing with SME customers, evolving new business cultures for the SME segment and enhancing the financial products and services offered to the SME industry. The share of SME financing has increased from 30% of the total business financing of banking institutions in 1999 to 44% at end-May 2008. In addition, a sustainable and comprehensive Microfinance Institutional Framework was implemented in 2006. Since its implementation, there has been considerable progress in the participation of financial institutions in providing microfinance. Currently, nine financial institutions have launched microfinance products, which has helped to increase access to financing to micro-enterprises. The outstanding micro-financing now amount to RM325 million with more than 31,000 customers. In addition, the financial service providers such as the Credit Guarantee Corporation and Bank Pertanian Malaysia, now known as Agro Bank, have been transformed into institutions that are more effective, efficient and financially sustainable. In relation to this, the SME Credit Bureau, a key initiative under the transformation plan of the CGC has officially commenced operations on 1 July 2008. The Bureau serves as a source of reliable credit information for both the SMEs and their potential financiers. The Bureau will assist SMEs to build a track record and thereby enhance access to financing on more favourable terms, leading to faster decisions on loan applications, and providing a balanced profile of the credit standing of the SMEs.