"The banks at present are focusing their attention on loan applications from big industries and the SMEs are having a problem getting capital," Abdullah said.

"The SMEs require greater attention in the form of capital and loans and the setting up of an SME bank will give them the opportunity for growth," he said.

Abdullah gave no further details, saying these would be worked out by the Treasury.

He was speaking to reporters after an annual conference of the National Economic Action Committee, which includes government and private sector leaders.

Abdullah said the question of revaluing the ringgit against the US dollar, a subject of widespread speculation, was not dicussed at the meeting.

The government has said it had no immediate plans to review the peg of 3.80 ringgit to the falling US unit but has not ruled out such a move in future.