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ADB Signs Agreement with A Bangladeshi Bank for Trade Finance Facilitation Program
Dhaka, Bangladesh

BRM Country Director Toru Shibuichi and Southeast Bank Ltd Deputy Managing Director Syed Imtiaz Hasib sign the trade finance facilitation agreement under the Trade Finance Facilitation Program (TFFP).

The Asian Development Bank signed a trade finance facilitation agreement with local bank Southeast Bank Ltd (SBL) in Dhaka today. SBL is the first private sector bank in Bangladesh to sign the facilities agreement with ADB under Trade Finance Facilitation Program (TFFP).

The signatories were Mr. Toru Shibuichi, ADB's Country Director for Bangladesh, and Mr. Syed Imtiaz Hasib, Deputy Managing Director, on behalf of SBL.

The agreement was part of ADB's new TFFP to use financial intermediation to facilitate private sector development and economic growth in the region.

The program has been designed to develop and enhance the capability of local banks to provide trade finance products to private sector importers and exporters to facilitate international trade. The program will support local issuing banks through two facilities:

1. a partial credit guarantee, under which ADB will guarantee to confirming banks the payment of letters of credit and other documentary credits issued by accredited local banks in the Asian region
2. revolving credit facility, under which ADB will offer short-terms loans to accredited local banks to help fund the hard currency borrowing requirements of their private sector exporter and importer clients.

These facilities will offer importers and exporters access to reliable and reasonable terms and conditions for trade finance, as well as provide liquidity and stability to the trade finance system.

The program will also make it easier for local banks to deal with their international counterparts; lower the need for the local banks to provide cash collateral; reduce the risk for importers and exporters by encouraging the use of trade finance instruments; and provide more cost-effective trade finance mechanisms.

Bangladesh is among the first countries, along with Sri Lanka and Viet Nam, where the TFFP is being implemented. Once the TFFP is fully implemented, more than 35 local banks in 16 countries are expected to participate.

ADB is dedicated to reducing poverty in the Asia and Pacific region through pro-poor sustainable economic growth, social development, and good governance. Established in 1966, it is owned by 63 members - 45 of which are from the region. In 2003, it approved loans and technical assistance amounting to US$6.1 billion and US$177 million, respectively.