to go " beyond banks and beyond lending " to close the sme funding gap. given the diversity of smes and their financing needs, we believe a more complete solution to the sme financing challenge must address efforts in three equal parts : 1 / 5 bis - central bankers'speeches first, enhancing the traditional role of banks and bank financing while recognising the limitations of bank financing, particularly at earlier stages of the life - cycle for new and innovative firms. second, developing and deepening alternative sources of financing to complement traditional bank financing. and third, strengthening firm - level factors to improve the ability of smes to gain affordable access to finance. important strides have been made to advance efforts on these fronts. access to traditional bank financing for smes continues to be enhanced through innovative modalities such as : itekad which blends philanthropic and commercial funds to provide seed capital and microfinancing to microentrepreneurs, alongside specific handholding and capacity building support. credit guarantee institutions such as cgc have introduced portfolio guarantees to provide credit enhancements at greater speed and scale for borrowers that lack collateral and track records. skim cakna, a liquidity scheme introduced in 2021, has also been successfully expanded to help smes manage their cashflows by leveraging on their contracts with the government. the imsme online referral platform, launched by the credit guarantee corporation malaysia ( cgc ), has helped reduce smes'search effort and costs for loans by matching their financing needs with relevant financing options from multiple providers – both banks and non - banks - thus addressing an important pain point faced by smes in sourcing suitable financing. this is complemented by the khidmat nasihat pembiayaan platform, or myknp, which provides advise to help unsuccessful financing applicants improve their eligibility for future financing. banks will continue to play an important role in the sme financing ecosystem, and there is still considerable room to further evolve their role – particularly in the area of enabling lending decisions based on alternative data and supporting larger ticket, longer - tenure and flexible financing solutions through risk - sharing arrangements that will not expose depositor funds to excessive risk. here, we are also making important inroads. the entry of digital banks and alternative fund raising platforms such as crowdfunding and p2p platforms that offer different business models and innovative approaches to credit assessments will contribute to the expansion and diversification of funding sources for smes

. we aim to further increase support for financing to businesses that can develop and scale green technologies and processes, or that are making meaningful efforts to transition to a low carbon model. financial institutions are also ramping up their own capacity to advise and provide technical support to smes on their transition journey, including in risk management and disclosure practices. these efforts are crucial to ensure alignment between banks'business and risk strategies with the transition path of smes. ladies and gentlemen, let me conclude my remarks. sme financing is an ongoing journey – and a crucial one for economic development and progress. although the share of bank financing to smes is high, relative to their current contribution to gdp, our goal is not to claim victory by a finite point in time, but rather to ensure, through effective policy interventions, that the broader financial system " beyond banks and beyond traditional forms of lending " is working to adapt and respond to sme financing needs. to do this, we will continue to engage closely with the sme community to understand your issues and challenges, and where relevant, to support your progress and development beyond financing. as these needs will continue to change over time, innovation is key. it goes without saying that we cannot do this alone. in any country, the agenda of uplifting smes calls for a whole - of - nation approach. government and financial policies play a critical role, but so does the willingness of banks to evolve current approaches. smes themselves also need to more actively engage in strengthening their own financial and business capabilities. bnm remains committed to working closely with partners within the industry and government. we will continue efforts to crowd - in private sector financing, whilst highlighting policy considerations and necessary reforms 4 / 5 bis - central bankers'speeches in the process. and we count on industry associations and experts to continue playing an active role as an aggregation point for smes, helping to raise awareness, co - create solutions and disseminate vital information. on that note, i thank you very much for your attention. 1 source : bank negara malaysia 2 source : bank negara malaysia 3 source : bank negara malaysia 5 / 5 bis - central bankers'speeches