ADB debuts risk sharing to support trade in developing Asia

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By 2017-10-19

The Asian Development Bank (ADB) and JP Morgan, a global financial service provider have signed an agreement to support trade in developing Asia.

The partnership was formed as part of the ADB Trade Finance Programme (TFP) that provides guarantees and loans to banks to support cross-border trade operations. According to the press release, with the new funded risk-sharing product, ADB and JP Morgan will share the risk on underlying trade finance transactions.
The agreement is expected to finance more than US$ 100 million in trade, which will help importers and exporters in developing Asia. ADB aims to empower small and medium sized enterprises (SMEs) with this product by addressing their pre- and post-shipment financing needs.

Under the TFP, ADB provides guarantees and loans to over 200 partner banks to support trade operations.
The significance of the programme is that it has been backed by ADB's AAA credit ratings; in terms of credibility considerations, the programme is at a high standard, according to the press release.

According to ADB's website since 2009, ADB's TFP has supported more than 11,000 SMEs across developing Asia. TFP has facilitated cross-border operations in sectors ranging from commodities and capital goods to medical supplies and consumer goods.
ADB is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. JP Morgan's Corporate & Investment Bank is a global financial service provider that provides financial services across banking, markets, and investor services.

ADB hopes the TFP will continue to grow, supporting cross-border trade operations throughout the region, which will, in turn, help to create sustainable jobs and economic growth in developing Asia.

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