KUALA LUMPUR: Bank Pembangunan Malaysia Bhd (BPMB) chairman Datuk Seri Nazir Razak has called for the rapid consolidation of development financial institutions (DFIs) in the country as there are too many sub-scale DFIs with overlapping mandates.

       “One of Malaysia’s economic problems is that we have too many sub-scale DFIs and overlapping DFI mandates. A transformation of the sector is long overdue.

       “Since the Asian financial crisis, we have transformed our capital markets, our government-linked companies, our banking system and governance of our corporate sector but we have done little to DFIs,” he said.

       He lamented the fact that during the Covid-19 economic and health crisis, the DFIs were not strong enough to provide effective counter-cyclical support to businesses and the economy.

       Nazir said this in his speech at the virtual signing ceremony of an agreement between BPMB, Credit Guarantee Corp Malaysia Bhd (CGC) and the Minister of Finance (Inc) for BPMB’s 100% acquisition of Danajamin Nasional Bhd.

       He said aside from counter-cyclical lending, the strengthening of Malaysia’s DFIs would enhance financial institutions’ ability to support national economic development by availing capital to borrowers neglected by private banks, providing subsidised capital for priority sectors and crowding in private capital to key segments of the economy.

       “We at BPMB are fully supportive of the government’s efforts and will work together with all stakeholders to achieve the goal of building a stronger DFI sector for the economy. — Bernama