Similarly, there are also some sectors or groups of businesses which, due to their business characteristics and lack of track record, limited credit history and inadequate collateral, do not have adequate access to financing from the banking system. These are clearly instances of market failure, and the establishment of the DFIs is indeed an attempt to rectify this shortcoming. In this regard, in achieving national policies for economic and social development, the DFIs are established as a strategic conduit to bridge the gaps in the supply of financial services, by channelling the resources and funds in the financial system to areas and sectors that are deemed as strategic for long-term economic development purposes. In essence, the DFIs are complementing the banking institutions in meeting the financing requirements of the  1/5  economy, particularly in supporting the economic and social development of a nation. The establishment of DFIs is part of the national development plan itself. As policy-based financial institutions, the DFIs have roles and mandates which are linked closely to the country's national development objectives. This is evidenced from the establishment of DFIs with specific purposes to promote development of identified sectors, ranging from industrial and agriculture sectors to areas such as export promotion, infrastructure development as well as the small and medium enterprises (SMEs). It is notable that the roles of DFIs have evolved in the course of a country's economic development and transformation. This is important in ensuring that the DFIs remain relevant to support the changing financing needs of the economy.

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.