The SME financing guide book being launched today is initiated by the Institute of Bankers Malaysia to provide detailed guidance to assist SMEs in their applications for financing from financial institutions. It also provides information on the factors that are taken into consideration by financial institutions in approving the applications. In addition, it elaborates on the responsibility of borrowers, and the redress mechanisms that are available. Irrespective of sectors, SMEs should adopt best practices in financial management to ensure their business will remain sustainable. Managing costs will also enhance the performance and competitiveness of the business in both domestic and global markets. SMEs should therefore actively draw on the wide range of products and services including advisory services offered for every stage of its business cycle, whether it is a start-up, growing or a matured business. The expertise, extensive network and the broad range of services and products which are in place should be leveraged upon by the SMEs. Recognising the importance of SMEs in contributing to the socioeconomic development of the country, the Government has introduced various programmes to assist SMEs through its Ministries and agencies. The infrastructure to support access to SME financing has also vastly improved compared to a decade ago. In 2012, a total of RM217.2 billion in financing has been disbursed to SMEs through the banking system, compared to only RM87.1 billion in 2003. This year, 155 SME development programmes with an allocation of RM18.4 billion have been developed and which is being channeled through government agencies and the private sector.

In the event of conflicting objectives, it achieves a reasonable compromise between the stability of inflation and the stability of resource  BIS Review 112/2009  1  utilization. 1 Different central banks express this in slightly different words. The Riksbank has often used the term “well-balanced” monetary policy. 2 The forecasts of inflation and the real economy are then conditional on the central bank’s view of the transmission mechanism, an estimate of the current state of the economy and a forecast of important exogenous variables. The central bank uses all relevant information that has an impact on the forecast of inflation and the real economy. In this framework, the central bank takes financial conditions such as credit growth, asset prices, imbalances, potential bubbles and so on into account only to the extent that they have an impact on the forecast of inflation and resource utilization. Inflation and resource utilization are target variables here, that is, variables that are arguments of the central bank’s loss function. Hence, financial conditions are not target variables. Instead, they are only indicators, as they provide information about the state of the economy, the transmission mechanism and exogenous shocks to the central bank. Financial conditions then affect policy rates only to the extent that they have an impact on the forecast of inflation and resource utilization. 3 3. Financial stability as a rarely binding constraint – a pre-crisis view  What is the role of financial stability in a pre-crisis view of flexible inflation targeting?