20100423 - sme & micro financing malaysia's experience

SME and Micro financing: Malaysia’s Experience

Presentation for the Financial Inclusion Advisors ProgrammeKampala, Uganda

Development Finance and Enterprise DepartmentBank Negara Malaysia

26 April 2010

Outline

• Context:

The Malaysian economy

The Malaysian financial system

Bank Negara Malaysia’s mandate

• Malaysia’s Experience:

SME financing

Micro financing

Consumer protection & redress

• Way Forward

2009Global

Recession

1997-98Asian Crisis

1957-2008: Four different phases of economic growth

Commodity-driven and import substitution

Rural development and nascent industrialisation

Rapid industrialisation and global integration

Towards higher knowledge-based economy…

In the last 5 decades, Malaysia has witnessed major structural transformation of the economy

1957-70 1971- 85 1986-99

1960 1970 1980 1990 20002009

2000 onwards

• A private-sector driven, commodity-based economy

• Pursued an import substitution strategy

• Government emphasised on rural development and initiated effort on industrialisation

• Malaysia entered first recession in 1986 - collapse in commodity prices, twin deficit position

1985 Recession

• Policy thrust to develop Malaysia into a knowledge-based economy

• Growth was driven by domestic demand

• Post-crisis, Government pursued rapid industrialisation, export promotion and introduced economic liberalisation

• Malaysia entered second recession in 1998 – due to speculative attacks on Asian currencies

Outcomes of four decades of economic transformation

Transformation into an upper middle income economy

− 7-fold increase in per capita income from RM1,132 in 1970 to RM25,800 in 2008

− Incidence of absolute poverty reduced from 49% in 1970 to 3.6% in 2007

Sectoral diversification into services and manufacturing

− Services share of GDP grew from 42% in 1970 to 55% in 2008

− Manufacturing share of GDP rose from 13% in 1970 to 29% in 2008

Outline

• Context:

SME financing

Micro financing

• Way Forward

OFFSHOREOFFSHORE

Financial Markets

ONSHORE ONSHORE

Payments and Settlement Systems

Malaysian Financial System Landscape

A dual financial system with conventional and Islamic finance operating in parallel

• Commercial Banks• Islamic Banks• Development Finance

Institutions• Investment Banks• Insurance Companies• Takaful Operators• Reinsurance Companies

• Insurance Intermediaries• Money Brokers• Dealers / Brokers• Venture Capital / Private Equity• Unit Trust Companies• Fund Management Companies• Stock Broking Companies /

Universal Brokers

Offshore financial

institutions

• Money Market• FOREX market• Derivatives Market

• Capital Market Equities Market Bond Market

Non-Bank Financial Intermediaries

Financial Institutions

Size of financial system participants

Commercial banks40.9%

Bank Negara Malaysia13.1%

EPF & other pension funds

16.8% Other financial intermediaries

General insurance funds

Life insurance funds4.9%

Islamic banks8.1%

Investment banks2.2%

Development financial

institutions5.9%

0 5 10 15 20 25 30 35 40 45

Retakaful Operator

Takaful operator

Reinsurer

Insurance Co

Investment Bank

Islamic Bank

Commercial Bank

Domestic

Foreign

• Total assets of financial system at end-2009 was RM2.8 trillion

• Banking system continues to be primary financial intermediaryAccounted for >50% of financial system assets

No. of financial institutions in Malaysia (as at end 2009)

The financial sector today is more resilient, efficient and competitive

Commercial Banks

Domestic Foreign

2003 2009 2003 2009

Profitability

Return on Equity (%)

Return on Assets (%)

Asset Quality

NPL Ratio – 3mth classification (%)

9.5 1.7 4.5 1.7

Av. Asset Size

(RM bil)44.9 95.9 12.3 21.0

Shareholders’ Funds

(RM bil)4.0 9.3 0.9 1.7

Finance & Insurance

Sector2003 2009

Annual Growth 6.4% 4.4%

Share of GDP 9.7% 11.7%

Strong key financial indicators Enhanced contribution of financial sector to economy

Outline

• Context:

SME financing

Micro financing

• Way Forward

Central Banks in emerging economies have a wider role to promote balanced & equitable growth

• Developmental role in charting direction and institutional set-up of financial system and overall economy

• Financial inclusion to ensure that all segments of society have access to financial services

• Greater sensitivity to political & socio-economic imbalances

Approach

Consideration to socio-economic

agenda

Greater challenges in preserving financial stability

as emerging markets are more fragile

• More hands on approach to ensure efficient, competitive and resilient financial sector that contributes to overall economic growth and stability

Principal objects

Promote monetary stability and financial stability conducive to the sustainable growth of the Malaysian economy

Principal objects

• Issue currency and to keep reserves safeguarding the value of currency

• Promote monetary stability and a sound financial structure

• Promote the reliable, efficient and smooth operation of national payment and settlement systems and ensuring that systems policy is directed to the advantage of Malaysia

• Act as a banker and financial adviser to the Government

• Influence the credit situation to the advantage of Malaysia

Mandate under the new Central Bank Act 2009

Primary functions

• Formulate and conduct monetary policy

• Promote exchange rate regime consistent with fundamentals

• Regulate and supervise financial institutions

• Promote sound, progressive and inclusive financial system

• Provide oversight over the money and foreign exchange market

• Hold and manage foreign reserves of Malaysia

• Issue currency

• Exercise oversight over payment system

CBA 1958

Mandates broadly defined

CBA 2009

Strategically focused

Outline

• Context:

SME financing

Micro financing

• Way Forward

Malaysia ranks high in terms of access to financing

Category Ranking / Response Source

‘Getting Credit’ No. 1 for 3 years World Bank (Doing Business 2008, 2009 & 2010 Reports)

‘Loans accounts per 1,000 adults’

No. 5 Consultative Group to Assist the Poor (Financial Access Report 2009)

‘Ease of Access to Loans’ No. 13 in 2009 (up from no. 15 in 2008)

World Economic Forum (Global Competitiveness Reports 2008-2009 and 2009 – 2010)

‘Obtaining Financing from FIs’

62.9% of respondents did NOT face difficulties

FMM (3rd Survey on Global Economic and Financial Crisis, 2009)

‘Financing from FIs’ 77% of respondents received financing from the FIs

SME Corp (3rd Survey on Impact of Global Crisis on SMEs, 2009)

Banking system is the major financier to SMEs

• More than 80% of total SME financing are from banks

• Banks have 522,141 SME accounts

Financing Outstanding as at end-Feb 2010 RM billion

Factoring and Leasing2

DFIs16.7

BIs120.4

Government Funds and Schemes1

Venture Capital2

Source: Bank Negara Malaysia, SME Corp and Securities Commission

1/ At end-Sep 2009

2/ At end-2008

Banks continued to support financing needs of SMEs in difficult environment

TitleMeasure

2003 2004 2005 2006 2007 2008 2009 2010J-F

Approval rate remained high at 84%%

All customers

Source: Bank Negara Malaysia

SMEs’ share of business financing increased significantly to 39%%

End-199827

End-Feb 2010

SMEs in all economic sectors have access to financing

• BIs continue to support the financing needs of the key economic sectors

Agriculture5% Others

Construction12%

Manufacturing24%

Services50%

RM 120.4 b as at end-Feb 2010

Financing Outstanding by Sector

• Services sector accounted for the largest share (50%) of total financing outstanding at end-Feb 2010

Source: Bank Negara Malaysia

Comprehensive initiatives to ensure continued access to financing for SMEs

Financing Schemes

• BNM SME Funds

• EXIM Overseas Guarantee Facility

• Venture Capital Funds for Agriculture

Financial Infrastructure

Guarantee Schemes

• SME Assistance and Modernisation Facilities (RM1.2 bil)

• SME Assistance Guarantee Scheme (RM 2 bil)

• 2 Government Guarantee Schemes (RM10 bil)

Working Capital Guarantee Scheme & Industry Restructuring Financing Guarantee Scheme

• Credit database to facilitate a more efficient & effective credit process

• Check financial standing of customers & suppliers

Central Credit Reference Information System

SME Credit Bureau

Credit Guarantee Corporation

• Assist SMEs that have inadequate track record or collateral to obtain credit facilities from FIs by providing guarantee cover

• Offer a wide range of products (e.g. credit enhancement products) and services (e.g. advisory, market research) to enhance SMEs’ ability to obtain financing

Recent

stimulus

measures

Central Credit Reference Information System (CCRIS) as the main credit database in Malaysia, enhances access to financing for SMEs

Description

• Managed by and located at BNM

• Collect info from banks and regulated FIs

• Comprehensive database

Benefits

Benefits of CCRIS

• Provide credit information to FIs to:– Facilitate credit

assessment of customers– Facilitate credit risk

management– Promote more efficient

credit processes

To FIs

• Facilitate BNM for regulatory, supervision and analytical purposes

To BNM

• Conduit to inculcate good credit culture

To the public

CGC’s SME Credit Bureau (www.smecreditbureau.com.my)

• One-stop central database of credit-related info on SMEs that provide consolidated credit information, including credit ratings

• Benefits to SMEs

• Access financing on more favourable terms, and obtain faster decisions on financing applications

• Have financing applications evaluated on a more balanced and objective basis

• Identify areas for improvement (reports and ratings as a self-evaluation tool)

• Check financial standing of customers & suppliers

– Decide whether to give better credit terms or accept their guarantees

• Commenced operations in July 2008

• Currently open to SMEs for registration at www.smecreditbureau.com.my

• More than 28,000 SMEs and 38 FIs have registered as members

CGC was established to assist SMEs with inadequate collateral or track record get access to financing

Outcomes

• Provide credit guarantees and advisory services to SMEs that do not have adequate collateral or track record, in a financially sustainable manner

• Bridge the gaps between businesses and banks via guarantee mechanism

• Embarked on transformation plan in 2006

• Guaranteed more than RM45.3 billion financing to 404,460 SME accounts since 1972

• Outstanding guarantee of RM11.1 billion financing to 41,646 SME accounts as at end February 2010

• SME Credit Bureau - members registered as at Feb 2010 were 38 financial institutions & 28,200 SMEs

• Expanded scope of guarantee beneficiaries to include Islamic banks and DFIs

• Expanded product range

- Participated in securitisation of SME loans as credit enhancer

- Introduced equity financing through joint venture with global fund management company

- Introduced guarantee scheme for start-ups

- Introduced direct lending

• Introduced risk based pricing structure for guarantee

• Established SME Credit Bureau in 2008, subsidiary to provided credit information services on SMEs

Key achievements

More than 20,700 SME accounts approved No of accounts (‘000)

SAF&SMF

SME AGS

RM11.0 bil approvedRM billion

SAF&SMF

SME AGS

WCGS (Fully utilised)

(Fully utilised)

(Completed)

SME AGS - SME Assistance Guarantee Scheme, BNM (as at 21 Mar 2010)SAF & SMF - SME Assistance and SME Modernization Facilities, BNM (as at 21 Mar 2010)WCGS - Working Capital Guarantee Scheme Facility, MOF (as at 25 Mar 2010)IRFGS - Industry Restructuring Financing Guarantee Scheme, MOF (as at 25 Mar 2010)

Recent risk sharing schemes have assisted viable SMEs to obtain financing

Source : CGC and Prokhas

Outline

• Context:

SME financing

Micro financing

• Way Forward

Ensure that every economic activity,

geographical region & segment of society

has access to financial services

Financial inclusion objective to promote balanced growth

PROMOTE BALANCED & EQUITABLE GROWTH

Access to Financing

Access to Financial Services

Access to Financial Assistance

Access to Financial Information

FINANCIAL INCLUSION

Importance of financial inclusion

Ensure all economic sectors, regions and the population at large have access to a broad range of financial products and services

Promote broad based and balanced growth

• Bring lower income groups and micro enterprises into the economic mainstream

• Enable poorer segments of the population and micro enterprises to participate in income-generating economic activities, thereby, equalising opportunities and reducing inequalities

• Bring lower income groups and micro enterprises into the economic mainstream

• Enable poorer segments of the population and micro enterprises to participate in income-generating economic activities, thereby, equalising opportunities and reducing inequalities

The philosophy of development, growth with equity/balanced distribution is integrated in all Malaysian development policies

Financial inclusion is one of a range of strategies to eradicate poverty

Healthcare

Basic services

Eradicating poverty requires access to

financial services & …Education

Housing

History of Microfinancing in Malaysia

Amanah Ikthtiar Malaysia (AIM)

Tabung Ekonomi Kumpulan Usaha Niaga (TEKUN)

Central Bank (Amendment) Act 2009

NSDC Microfinance Institutional Framework

For sources of microcredit, people find engage in lending from pawnshops, family and friends, and from moneylenders or ceti.

For savings, people kept their money in cash or put them into tangible assets such as gold, jewellery and properties. They also engaged in rotating savings and credit associations, ROSCAs or, more commonly known as, kutu.

Findings from a Census* in 2005 showed that there was an opportunity for the formal financial system to serve the micro enterprises

Most establishments in Malaysia are micro enterprises ..

Micro enterprises80% (435k)

Small 18% (100k)

Medium2% (12k)

• 99.2% of establishments in Malaysia are SMEs

• Total No. of SME Establishments: ~548,000

50%43%

7%8%10%

Micro Small Medium Large SMEs

Own Money

Friends & Family

Others

Main Sources of Financing

.. but only 13% indicated that financial institutions were their main source of financing

Source: Census of Establishments and Enterprises 2005 , Department of Statistics Malaysia

Prior to 2006, micro financing was provided by Government sponsored schemes ..

TEKUN 24%

AIM22%

Govt. sponsored micro credit

schemes54%

via National Savings Bank & Agriculture Bank

Micro financing OutstandingEnd-2000

Opportunity

• Attractive market currently served by shadow banking system

• Liberalised interest rate framework to generate good return of equity (ROE)

• Internet and mobile technology lower cost of outreach

Strength

• Ample liquidity in banking system

• Wide branch network

• Wide depositor outreach, source of microfinance customers

Weakness

• Existing procedures not tailored to needs of micro enterprises

• Lack of products suited for micro enterprises

• Low risk appetite for non collateralised loans

Threat

• Narrowing margins in existing business lines

Financial institutions can benefit from offering microfinancing

Challenges Solutions− Target group that is geographically dispersed

and have low financial literacy

− Target group is averse to approaching financial institutions

− High admin cost to serve the target customer

− Lack of economies of scale

− Products that meet the needs of the target customer i.e. easy, fast and convenient

− Pricing of products that incentivise outreach

− Leveraging on existing banking branch infrastructure and that of strategic partners

− Increased promotion and awareness

Successful microfinance needs to overcome several challenges

A sustainable microfinance mechanism needs to be in place to complement the micro financing schemes by Government

Objective: Enhance access to financing to micro enterprises

.. by encouraging financial institutions to provide sustainable microfinance

Objective: Enhance access to financing to micro enterprises

.. by encouraging financial institutions to provide sustainable microfinance

• To ensure micro enterprises has continuous access to financing to support their business activities

• To extend outreach to more micro enterprises

• To ensure FIs are financially sustainable

KEY PRINCIPLES TO ADOPT:

Commercially driven with market based lending rates to ensure sustainable operations

Funding should be self-sustaining

Crucial to have a well defined business model in place

The National SME Development Council (NSDC) approved a comprehensive sustainable microfinance institutional framework in 2006

Definition of Microfinance

• Financing up to RM50,000 (USD16k) to micro enterprises for business purposes

• Easy, Fast and Convenient

√ No collateral

√ Minimum documentation

√ Simple application procedures

√ Fast approval and disbursement

National Savings Bank (DFI)

Agriculture Bank (DFI)

Cooperative Bank (DFI)

Banking Institutions

Cooperatives

Leverage on existing infrastructure

Nine financial institutions rolled out micro financing products

TEKUN Tabung Ekonomi

Kumpulan Usaha Niaga in Nov ‘98

AIM Skim Pembiayaan Ikhtiar in Sept ‘87

1998BPM

Modal Usahawan Tani (MUST) in Sept ’05

PublicPBMicro Finance in

Dec ’06

BSN TemaNiaga in Mar ’07

5th NSDC Meeting (Approved Framework in Aug ’06)

AMBank AmMikro in

Feb ’07

B. Rakyat Pembiayaan Mikro-i

(Modal untuk Usahawan Koperasi – MUsK) in Apr ’07

AllianceRakan Personal Financing-I in Jul ’07

Conventional in Aug ’07

CIMB Xpress Cash Personal

Loan in Aug ‘05

UOB EasiCash in Jul ’06

EONCAP Islamic Pinjaman Peribadi – i

Pesara (3P) in Dec ’06

CIMB Xpress Cash Financing-i in Sept ‘07

Incumbent Players After NSDC’s Approval on Framework

The microfinance industry has grown

100% = RM151 m (USD45 m)

Govt sponsored Schemes

9 Financial Institutions TEKUN

100% = RM2.4 bil (USD747mil)

CAGR: 35.9% yoy

26%35%

RM617 mil

RM295 mil

RM647mil

RM835mil

Micro enterprises have benefited from micro financing by the 9 FIs

10,081

22,788

45,179

58,271

End-06

End-07

End-08

Feb-10

Microfinance access pointsMicrofinancing outstanding (USD mil)

Microfinance clients outstanding

26End-06

End-07

End-08

Feb-10 25% yoy

22% yoy

• Average financing size of RM10,200 (USD 3,188)• Available at:

1,868 access points, including outlets of strategic partners

RM634 mil

RM478 mil

RM225 mil

RM84 mil

The steps taken to create a sustainable microfinance industry

Encourage FIs to provide microfinance

Design right product to meet needs of micros

Create widespread awareness on the availability and benefits of microfinance

BNM encouraged financial institutions to provide microfinance

Activities

• BNM leadership organised and led FI CEOs and senior management on study visits to successful microfinance institutions in Indonesia & India

• Provided microfinance global case studies and information pack to the FIs

• Frequent discussions with FIs

Promote competition to ensure benefits flow to micro enterprises

• Diversify portfolios• Create new revenue streams• Use excess liquidity profitably• High ROE business • Can charge rates to reflect costs

Microfinance can be profitable

‘Blue ocean’ business

• High competition in existing businesses• Venture into uncontested market space

Competitive advantage

• Extensive branch network & resources • Cost effective funding source from

deposit base • Opportunity to form ‘smart partnerships’

to lower admin cost & enhance outreach (e.g. Felda, Pos, convenience stores)

Enhance image

• Contribute to national economic development

• Enhances image of bank

Jointly designed the right product to meet the needs of micro enterprises‘Easy, fast & convenient’

Low interest rates

Safety Easy- No collateral- Min documentation- Simple procedures

FastFast approval & disbursement

ConvenientWidely accessible at branches and other distribution channels

Local moneylenders

Traditional banks that offer various types of products

Value to

micros

Product features

Formal financial institutions that provide microfinance

Market research

Key benefits of Pembiayaan Mikro Easy, Fast & Convenient

Key Benefits of

Microfinance

Small Financing Amount

FastConvenient

Use for Business Purposes

• Loan size ranging between RM500 to RM50,000

• No Collateral• Minimum documentation• Simple loan procedure

• Fast approval • Fast disbursement

• Widely accessible

• Financing is offered to micro enterprises

Financial institutions adopted diverse business models to provide micro financing

• Study visits

• Market research

• Pilot tests

Microfinance Business Models

MonolineMass market

Cooperatives Distributor network

Created the Micro Enterprise Fund to lower the financing cost to micro enterprises in a responsible manner

Micro Enterprise

• RM 200 million revolving fund

• Soft loan to FIs at a concessionary rate

Financial Institutions

Micro Enterprises

• Micro loans at reduced retail financing rates but higher than SME financing rates to prevent leakages of assistance and disincentive to remain small

• FIs carry credit risk to encourage responsible credit approval and monitoring practices

Various initiatives in promoting widespread awareness on the availability and benefits of microfinance

• National Microfinance Logo

• Distribution of Microfinance flyers and comparative table of microfinance product features

• Advertisements / Interviews in TV, radio and newspapers

• Information booths at exhibitions / roadshows

• Posters/Buntings of Microfinance

• Financial institutions own sales & marketing

A National Microfinance Logo to provide prominent identity and create greater awareness on microfinance

• Branches of financial institutions that offer microfinance displayed the logo

• Microfinance customers are encouraged to display the logo at their business premises

Rationale for the National Microfinance Logo

Major organisations (e.g. FIs)

Wave-like formation at the outer ring denotes the spread of wealth and resources from major organisations to smaller organisations

Smaller organisations

Colour GREEN represents ‘life’

Microfinance logo displayed at financial institutions, strategic partners and borrowers

(1) Financial Institution (2) Financial institution (3) Strategic partner (4) Customer

Distribution of multi-lingual microfinance flyers at strategic locations & via direct mailing

Comparative table on the features of various microfinance products

Direct Mailing of Microfinance flyers to 397,209 micro enterprises

• Mailing addresses for micro enterprises provided by DOSM

• Printing and mailing of materials outsourced to the National Printing company

• Mailing materials consist of:– Pembiayaan Mikro flyers

– Comparative table of all Pembiayaan Mikro product features

– SMS Survey to gauge awareness level on Pembiayaan Mikro

TV and radio commercials (Barber Shop)

TV and radio commercials (Tailor)

News articles & interviews on microfinance by Malaysian leaders

Microfinance articles featured in SME magazines

Information booths at exhibitions / roadshows

Microfinance Poster/Buntings

Continuous promotions and awareness programmes

Above the line promotion

Below the line promotion

SME Promotions and Awareness Programmes

2009 Jan-Feb 2010

Radio advertisements 1,078 700

Advertisements in newspapers / magazines

SME articles 26 -

Live radio and TV interviews

SME Promotions and Awareness Programmes

2009 Jan-Feb 2010

Mailing of Pembiayaan Mikro flyers

400,000 -

Distribution of SME information materials

112,000 15,850

Outreach events 45 6

SME Financing Fairs and state level dialogues

Outline

• Context:

SME financing

Micro financing

• Way Forward

Comprehensive mechanisms in place for consumer education and protection

Enhancing Financial Awareness

Fair Market Practices

Enhanced Disclosure

Structured consumer education programme e.g. websites & information booklets

Exhibitions / road shows

Distribution of promotional materials

Mass media advertisements

Transparency & disclosure requirements for banking & insurance products

Market conduct requirements for market players

Avenues to seek Help & Redress

Integrated Contact Centre: BNMLINK, BNMTELELINK, complaints management & advisory section

Complaint & SME advisory units at financial institutions

Small Debt Restructuring Scheme (SDRS)

ABMConnect Toll Free Channel

Credit Counselling & Debt Management Agency (AKPK)

Financial Mediation Bureau

Advisory services through the SMEInfo Portal

Malaysian Deposit Insurance Corporation

Financial Safety Net

Services

Provide information on sources of financing

Facilitate in financial-related matters such as financing applications and financing restructuring / rescheduling

Mediate disputes between SMEs and financial institutions

Assist through Small Debt Resolution Scheme (SDRS) for viable but financially distressed SMEs

BNM’s financial advisory services via BNMLINK & BNMTELELINK (Integrated Contact Centre)

Tel: 1-300-88-5465 (LINK)

BNM has assisted 253,801 clients in 2009No of clients

244,882

Debt mgt &resolution

Information& guidance

AKPK has assisted 36,848 clients in 2009No of clients

For BNM:

• Majority (96.5%) sought information

• 84% of cases related to financing were resolved

• 50% were resolved in favour of consumers

Many have benefited from the advisory and resolution services provided

16,184

20,664

Debt mgt &resolution

Information& guidance

Source: Bank Negara Malaysia and AKPK

The Small Debt Resolution Scheme

• Objective• To assist viable but financially distressed

SMEs, by rescheduling & restructuring

• Providing a channel for SMEs to get assistance..• Committee established to provide independent

assessments on applications rejected by financial institutions

• Has assisted more than 690 SMEs to restructure their financing (78% success rate)

• Encouraged banks to restructure financing under their own schemes

• R&R more than doubled in 2008

• 2% of R&R under SDRS; 98% banks’ own scheme

• Provided discussion platform for bankers (SMEs with financing from multiple banks)

Outline

• Context:

SME financing

Micro financing

• Way Forward

Greater role of the financial sector as an enabler, catalyst and driver of growth

Reinforce Malaysia’s position as an international hub for Islamic services through accelerated development and promotion of Islamic finance

Foster increased international linkages and regional integrationthrough enhanced presence of Malaysian financial institutions & development of the domestic and regional financial markets

Moving forward, the financial sector is well positioned to support and contribute meaningfully towards economic transformation

ENABLER

Continued intermediation of funds to support economic activities

CATALYST DRIVER

Accelerate growth of supporting and ancillary

services sectors

Generate higher contribution to gross

domestic product

PROMOTE SOCIO-ECONOMIC DEVELOPMENT OF MALAYSIA

PRESERVE FINANCIAL SOUNDNESS & STABILITY

A new Blueprint for the financial sector is being developed for the next decade

Goals of Malaysia’s New Economic Model

Lessons Learnt

Important to have clarity of the desired end game

Capability enhancement must be viewed in a comprehensive

manner (people, process, structure and technology) to achieve

improvements by design

Developmental initiatives must be forward looking and pre-emptive

in nature.

Change in culture must be undertaken to support transformation

Behavioural change takes a long time

Culture change must be embedded in the process & system (or

else, people will revert back to the old ways)

Critical to put in place an effective performance measurement

system

Co-ordination and collaboration with the Government is necessary

Clear philosophy underlining future path and objectives

Useful links

• SME Info Portal

• http://www.smeinfo.com.my

• Bank Negara Malaysia (http://www.bnm.gov.my)

• BNMLINK - http://www.bnm.gov.my/bnmlink/index.htm

• CCRIS – http://creditbureau.bnm.gov.my/

• SME Corporation Malaysia

• http://www.smidec.gov.my/

• Bankinginfo and Insuranceinfo

• http://www.bankinginfo.com.my

• http://www.insuranceinfo.com.my

• Financial Mediation Bureau (FMB)

• http://www.fmb.org.my/

• Credit Guarantee Corporation Malaysia Berhad (CGC)

• http://www.iguarantee.com.my/

• SME Credit Bureau

• http://www.smecreditbureau.com.my/

• Credit Counselling and Debt Management Agency

• http://www.akpk.org.my

SME and Micro financing: Malaysia’s Experience

Presentation for the Financial Inclusion Advisors ProgrammeKampala, Uganda

Development Finance and Enterprise DepartmentBank Negara Malaysia

26 April 2010

20100423 - sme & micro financing malaysia's experience

financial system assets

dual financial system

resilient financial

financial stability

primary financial intermediary

malaysian economy

banking system

central banks

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