The Asian Development Bank (ADB) and Deutsche Bank have signed a risk participation agreement to enhance access to financing for small and medium-sized enterprises (SMEs) in Asia and the Pacific.
The agreement was signed between ADB’s Trade and Supply Chain Finance Program (TSCFP) and Deutsche Bank AG through its Singapore branch.
“Partnering with Deutsche Bank will allow companies, particularly SMEs, to access the global supply chain which can spur economic growth and contribute to job creation,” said ADB’s Director General for Private Sector Operations Suzanne Gaboury. “Partnerships like this one allow ADB to catalyze the private sector and mobilize capital for trade transactions that support development across the region.”
Supply chain finance is critical to increasing trade by providing working capital to suppliers by leveraging their relationships with larger corporates. With short-term revolving facilities for supply chain finance transactions, this partnership has the potential to support more than $200 million in additional trade in Asia and the Pacific each year.
The agreement will enhance Deutsche Bank’s ability to support SMEs and other corporate clients by releasing more capital for use in key economic sectors in the region, like pharmaceuticals and agriculture.
“We are proud to partner with ADB on this important initiative. Together, we will help smaller companies achieve growth through better access to supply chain financing. We believe this is important, as we are seeing increasing demand for this in the trade sector,” said Deutsche Bank Head of Trade Finance and Lending for Asia Pacific Matthew Moodey. TSCFP is helping banks in Asia and the Pacific improve their ability to provide supply chain finance, particularly to SMEs. ADB estimates the gap between the demand for trade finance and the money available for it is at least $2.5 trillion, with SMEs the worst affected.
Backed by ADB's AAA credit rating and working with more than 250 partner banks, TSCFP is growing trade and supply chains with loans and guarantees that underpin economic growth. TSCFP is working to make global trade and supply chains green, resilient, inclusive, transparent, and socially responsible.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.