of access to credit by the world bank in 2008. despite its favourable assessment, efforts will continue to be intensified to ensure that this access continues, particularly during this more challenging and uncertain time. the establishment of the sme credit bureau is one of these measures. the sme credit bureau is a vital element in the information credit bureau industry. smes are thus encouraged to maintain and compile the required information so as to enhance their potential access to credit. smes are expected to benefit greatly from the services of the sme credit bureau. firstly, the sme credit bureau empowers smes to build their credit reputation from a wide range of transaction behaviors. these include transactions with suppliers, customers and utility providers. the record of transaction behavior is expected to provide comprehensive information on the smes, especially for smes that are accessing financing from the banking sector for the first time. secondly, the sme credit bureau uses a credit methodology that discounts aged information thus providing a fairer assessment of the smes current credit worthiness. smes should also use the services provided by the sme credit bureau to better understand the credit evaluation processes. this will facilitate the efficient processing of the loan applications. this will also allow smes to secure more favorable financing terms from financial institutions. this approach is also expected to incentivise smes to inculcate a credit culture that enhances their eligibility for financing. a positive assessment from the sme credit bureau will be recognized by all financial institutions. the smes will therefore have increased options and will be able to compare and obtain the most favorable terms. over the years, smes have become an increasingly important segment of the loan portfolio of our financial institutions. with higher exposures to this sector, the comprehensive information compiled by the sme credit bureau will be a valuable information source that will facilitate better monitoring and management of the sme portfolio. the information from the sme credit bureau will also expedite the assessment of developments in new markets and the creation of a liquid secondary market which would in turn increase the availability of funds to smes. consistent with the importance of the sme segment in the total loan portfolio, financial institutions should also regularly interface with sme associations so that financial services rendered to the sector can be more customised to the specific requirements of the sector. in this current challenging period of slower growth, financial institutions need to understand and address early the problems being faced by the smes. this may involve adopting greater flexibility

export sector is still important, the significance of domestic demand has gradually increased. in this current environment, the malaysian government has implemented a significant fiscal stimulus to sustain domestic demand. following the reduction in interest rates, retail borrowing costs have declined to new historical lows. thus both the fiscal stimulus and the accommodative monetary environment are expected to improve demand conditions in the second half of the year. malaysia also has diverse trading partners which contributes towards mitigating the full impact of the global slowdown on our domestic economy. businesses in malaysia have over the years continued to build trade and investment linkages with other emerging countries especially in asia. adequate access to financing is therefore vital not only for supporting domestic demand but also to ensure that malaysian businesses are able to take advantage of the opportunities in the regional and global economy. the strong domestic banking system, with its ample liquidity, has the potential capacity to provide the access to financing. some smes however are experiencing stress from the current more difficult environment. several preemptive measures have therefore been introduced to enhance the prospect for access to financing. the sme assistance guarantee scheme that was launched on 3 february 2009 to provide smes with an 80 % guarantee cover will enhance access to financing in addition to keeping the cost of financing low. as at 5 april 2009, more than 880 applicants have successfully obtained financing through this scheme and more than 790 applicants are still being evaluated. two additional schemes, the working capital guarantee scheme and the industry restructuring financing guarantee scheme, has been recently launched to enhance access to financing for working capital and to support long - term investments that will increase productivity and that will generate high value - added activities. the measures to enhance access to financing are also reinforced by the provision of financial advisory services and by developing channels for redress by borrowers. the bnm link and telelink established by bank negara malaysia and the abm - connect that has been set up by the association of banks in malaysia serve as important conduits for greater interface between the banks and the borrowers. these measures are also complemented by the institutional framework to deal with problem loans in the retail and business segments. the small debt resolution scheme ( sdrs ), which was created in 2003 to facilitate the restructuring and rescheduling of credit facilities for small businesses has now been expanded to include all viable smes facing financial difficulties with financing from multiple financial institutions. importance of information credit bureaus malaysia has been ranked number one in the world in terms