more favourable terms, and obtain faster decisions on their financing applications. this is because the bureau acts as a one - stop center for banks to obtain consolidated information on smes, which is currently scattered, and will take longer for banks to obtain and verify individually. we have already seen how this can work in the case of consumer financing, where real - time and comprehensive information on consumers ’ credit exposures and history that is available from ccris has significantly shortened loan - processing times. with greater availability of information on smes, the processing time for sme loans can be similarly shortened. thirdly, the bureau includes and takes into account both positive and negative information on smes. certain third party information that financial institutions use in the evaluation of credit applications only provides negative information on the business conducts. examples are information on bankruptcy and legal suits, which are sometimes not updated and may result in a biased assessment of creditworthiness. by collecting and disseminating both positive and negative information, the sme credit bureau will benefit sme loan applicants by providing a more balanced view of smes ’ credit standings. in an objective rating process, credit bureaus typically accord greater weight to the more recent credit information or behavior. negative records in the past can thus be mitigated by more current and consistent good track records. lastly and perhaps of most value to smes, is the insights that smes would gain from a better understanding of their financial deficiencies which lead to rejections of financing applications by financial institutions. this can be deduced from the analysis provided through the bureau ratings and reports. the credit reports would also serve as a convenient tool for smes to carry out a self - evaluation to identify areas that need improvement and initiate adequate remedial actions to increase their competitiveness. smes are thereby empowered to improve their own profile, with correspondingly enhanced prospects for the sme sector as a whole. as i mentioned earlier, it is also encouraging to see a considerable turnout by financial institutions at this seminar. this underscores the sustained and growing attention by financial institutions in the sme sector that is critical to provide the enabling environment for the sme sector to thrive. bank negara has seen a paradigm change in the way in which financial institutions approach the business of sme financing. banks have, and continue to invest significantly, in supporting sme financing niches, and the organisational changes that we have seen have been pervasive in many banks. these banks have acquired tremendous insights

the agriculture sector and the establishment of the small debt resolution scheme. the various measures have already yielded positive results. smes today have greater access to financing, with financial institutions being the main sme financing provider. in 2007, banking institutions approved rm55. 1 billion in new financing to more than 109, 000 sme accounts. sme financing continues to remain robust. for the first three months of 2008 alone, a total of rm12. 4 billion in new financing was approved to more than 34, 000 sme accounts. as at end - march 2008, sme financing outstanding by banking institutions amounted to rm118. 8 billion. indeed, an increasing number of banking institutions have announced strategic plans focusing specifically on the sme sector. this has seen the share of sme financing increase significantly from 30 % of total business financing of banking institutions in 1999 to 44 % at end - march 2008. within the overall sme financing landscape in malaysia, the cgc has been positioned to play a key role. established at the initiative of bank negara in 1972, cgc set out to address one of the main constraints of smes in accessing financing, which is the lack of collateral. since then, cgc with bank negara as its main shareholder and with shareholders funds amounting to rm2. 7 billion and guaranteed financing outstanding of rm10. 2 billion at end - march 2008, has evolved itself as an integral part of the financial landscape, with the financial capacity to deliver its mandate. in 2005, bank negara embarked on a strategy to transform cgc beyond that as a provider of credit guarantees to enhance the contribution of the fast - growing sme sector to the national economy. cgc is being now positioned to provide a wider range of credit enhancement products. more importantly, it is also being positioned to provide advisory services on financial and business development to smes. this represents a significant shift in cgc ’ s strategic orientation and is validated by studies of the experiences in other countries that have found such advisory support to be critical in enhancing the viability of smes. a number of recent initiatives under cgc ’ s transformation plan deserve mention. these include widening the scope of guarantees to also cover financing by islamic banks and development financial institutions, introducing a new guarantee scheme for start - up smes, participating in malaysia ’ s first synthetic securitisation of sme loans, introducing an equity financing arm, and introducing risk - based models for determining guarantee fees. the