BEIJING, PEOPLE’S REPUBLIC OF CHINA (11 April 2019) — The Asian Development Bank (ADB) and Sumitomo Mitsui Banking Corporation (SMBC) today signed an agreement to promote more than $100 million of trade annually across developing Asia. Under the agreement, signed on the sidelines of the International Chamber of Commerce Banking Commission’s annual meeting, ADB and SMBC will provide financing to support trade transactions in some of developing Asia’s more challenging markets.
“We are very pleased to expand our partnership with SMBC, especially under our newly launched funded trade finance product, which provides liquidity to banks in developing member countries,” said Investment Specialist at ADB’s Trade Finance Program (TFP) Mr. Santosh Pokharel. “These partnerships aim to provide more support for small and medium-sized enterprises (SMEs) and underpin growth and jobs to lift people from poverty and improve living standards.”
The agreement is expected to finance more than $100 million in trade each year, which will help both importers and exporters in developing Asia. SMEs are expected to be the biggest beneficiaries.
“We are excited to work with ADB on this funded trade finance product and all the new opportunities it will create,” said Group Head, Trade Solutions and Structured Export Finance, at SMBC’s Global Trade Finance Department Mr. Mitsuhiro Kawamura. “Asia’s trade flow remains buoyant, so efficient trade financing is crucial. This product with ADB is an innovative solution to our clients' trade financing needs.”
Backed by ADB's AAA credit rating, the TFP provides guarantees and loans to over 200 partner banks to support trade, enabling more companies throughout Asia to engage in import and export activities. Since 2009, ADB’s TFP has supported more than 15,000 SMEs across developing Asia—through over 21,000 transactions valued at over $36 billion—in sectors ranging from commodities and capital goods, to medical supplies and consumer goods.
In 2018, TFP grew almost 40% to support $6.2 billion in trade through 4,470 transactions. TFP complements its financial support with "knowledge products", including a study that quantifies market gaps for trade finance, initiatives to increase the role of women in banking, efforts to enhance environmental safeguards, and initiatives to fight crime through greater transparency in the global financial system. TFP also provides workshops and seminars to increase knowledge and expertise in matters related to finance, trade, risk management, and fraud prevention.
Previous collaboration between SMBC and ADB has focused on supporting trade in Bangladesh, Pakistan, Viet Nam, and other countries in developing Asia.
Headquartered in Tokyo, SMBC is a leading Japanese financial institution and a core member of the Sumitomo Mitsui Group. It is present in more than 39 countries and regions across the globe, out of which 14 are in Asia.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. In 2018, it made commitments of new loans and grants amounting to $21.6 billion. Established in 1966, it is owned by 68 members—49 from the region.