Development Finance Institutions can fund country's infrastructure development

KUALA LUMPUR: Development Finance Institutions (DFIs), formed to provide provide funding for those sectors normally not assisted by other financial institutions, have a potential role to play in funding the country's infrastructure development, says Minister in the Prime Minister's Department,Tan Sri Nor Mohamed Yakcop.

He said this includes projects to be undertaken to support private sector activities and public facilities as well as in strategic economic sectors that have a large spillover.     

The DFIs formed to develop the country's strategic economic growth sectors include Bank Simpanan Nasional, SME Bank, Bank Rakyat, EXIM Bank and Agro Bank.

"DFIs have an important role in being the catalyst of the country's economic transformation process.

"The funding facility provided by the DFIs has contributed a lot to the impressive growth of small medium enteprises (SMEs)," he said while officiating the launch of a seminar on the New Economic Model here today.

He also said the potential for the growth of SMEs was very big and this offered opportunties for the DFIs to latch on to, and optimise sources of funding for it.

Although the banking system represented the biggest source of funding for SMEs, their focus is primarily on those that are successful.

"This is where lies the key role of the DFIs to offer funding support, especially in fulfilling the needs of new SMEs and those with the ability to sucessfully compete.

"In this context, the DFIs need to more flexible in efforts to fund, guide and support the growth of new businesses," he added.

Nor Mohamed said in line with the strategy to encourage growth based on productivity and innovation, the time has come for DFIs to spearhead the contribution towards the growth sectors identified under the New Key Economic Areas (NKEAs), while encouraging SMEs to venture into business start-ups and venture capital.

He said, with expanding business to the export market continuing to be a challenge for the SMEs, the capability of EXIM Bank to provide funding, needs to be enhanced to assist Malaysian companies export a variety of products and services.

"In this regard, the DFIs also need to focus on developing new entrepreneurs through the process of commercialising research and development efforts," Nor Mohamed highlighted.

Touching on the 10th Malaysian Plan initiatives to encourage investments in the country, he said the government through the Malaysia Productivity Corporation is undertaking comprehensive research to modernise the business rules in the country.

He explained that rules which are no longer relevant would be abolished and replaced with new ones that provide a greater competitive edge.

"This effort is also to make Malaysia among the top ten in the World Bank Doing Business 2015 Report from the current 23rd," he added — Bernama
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