Remarks by ADB President Takehiko Nakao at the APEC Finance Ministers' Meeting - Session 2: Trade Finance on 20 September 2013 in Bali, Indonesia (as drafted).
Your Excellencies, distinguished guests, ladies and gentlemen:
I am honored to share some thoughts with you this morning on trade finance and, in particular, ADB’s Trade Finance Program.
Trade and trade finance are critical to the global and regional economy, in particular small and medium size enterprises and employment.
I would like to brief you on the major features of ADB’s Trade Finance Program which was created in 2004 and has been expanded through the global financial crisis in 2008-2009. The program fills private sector market gaps for trade finance by providing credit guarantees, risk participation agreements, and a revolving credit facility through over 200 commercial bank partners in the region. Decision of each transaction is made within 24 hours of a request based on agreed criteria.
At the height of the global financial crisis, Asia’s trade dropped by 18% during 2008-2009. In response, ADB increased its Trade Finance Program transactions from $461 million in 2008 to $1.9 billion in 2009. There has never been a default or loss either during or after the global financial crisis.
Cumulatively, we have supported over $13 billion in trade through over 6,000 transactions. In 2012, we had $4 billion in turnover, including $2.3 billion in cofinancing.
The Program is active in nearly 20 countries including Indonesia and other APEC countries. It is especially popular among frontier countries such as Viet Nam, Bangladesh, Pakistan, Sri Lanka, Mongolia and Nepal. We are in the process of expanding into Myanmar.
I would like to close by reiterating the importance of trade finance to economic growth and job creation. If recent turmoil in the region calls for public support for trade finance, ADB is happy to be a part of it through expanding its Trade Finance Program.