Nevertheless, it is envisaged that the DFIs are expected to evolve from being the direct financiers to function as a strategic conduit to facilitate financing by the banking system, especially through the provision of credit enhancement. In addition, the DFIs would also increasingly become specialised institutions to render advisory and business support services, in order to increase their effectiveness in meeting the financing and developmental needs. At the same time, the need for DFIs to remain financially sustainable while performing their mandated roles cannot be over-emphasised. This would require continuous capacity and capability enhancement of the DFIs, especially the strengthening of human capital skills and institutional efficiency, together with the adoption of good corporate governance and best practices by the DFIs. In addition, to ensure that available resources are channeled adequately and appropriately to support the targeted sectors, DFIs would need to strategically reduce the channeling of funds to the sectors and businesses that have matured and, on their own, would be able to obtain financial resources from the banking institutions or the capital market. In conclusion, I must say that the theme for today's forum on "Revving up the SMEs as the engine of growth" is both timely and appropriate given the importance and potential economic contributions of SMEs, particularly in the developing countries. Therefore, it is important that the SME sector continues to receive adequate and appropriate financial and ancillary support to ensure their sustainable development towards meeting a nation's development objectives.

The SME Bank, a specialised agency dedicated to the promotion of SME development, will commence operations in October 2005 and is envisaged to better serve the needs of SMEs through the provision of a comprehensive range of financial and non-financial services. In particular, the SME Bank will focus on nurturing the SMEs and promoting entrepreneural development, through the provision of financial and business advisory services, including financial management, business diagnosis and marketing support. Recognising the importance of human resource development as part of the capacity and capability enhancement strategy, several initiatives have also been undertaken to enhance the skills of DFIs, particulary in the provision of advisory services and micro financing. In collaboration with the Japan International Cooperation Agency, Bank Negara Malaysia is currently embarking on a project to enhance the capabilities of DFIs in providing advisory services to the SMEs. It is envisaged that the provision of quality advisory support can be used to supplement the financial services of DFIs, in order to enhance their effectiveness in supporting the development of the SMEs. In addition, Bank Negara Malaysia has developed and distributed a set of micro finance manuals to DFIs engaging in the provision of micro finance, for use as reference to acquire the knowledge of micro finance principles and best practices. This is to ensure a sustainable provision of micro finance by these DFIs. Going forward, the role of DFIs would not diminish, but continue to remain important and relevant, providing greater complementary and developmental role in addressing the nation's development strategies.