YOKOHAMA, JAPAN (9 May 2017) — The Asian Development Bank (ADB) and Kina Bank Limited (Kina) have signed a trade finance agreement enabling ADB’s Trade Finance Program (TFP) to provide a credit guarantee facility that can support up to $4 million of trade annually in Papua New Guinea (PNG).
The agreement was signed by Christine Engstrom, ADB's Director for the Private Sector Financial Institutions Division, and Syd Yates, Kina Group’s CEO, on the sidelines of the 50th Annual Meeting of ADB’s Board of Governors in Yokohama, Japan.
“We are delighted to be partnering with Kina Bank to support increased trade in PNG,” said Ms. Engstrom. “With ADB’s backing, Kina will be able to grow its trade finance operations and increase financial support to local importing and exporting businesses, including small and medium-sized enterprises.”
Kina is the first bank in PNG that TFP is partnering with, and the third bank in the Pacific to join the program. TFP has operated since 2004 across Asia, and in 2015 the Government of Australia provided financial assistance for TFP to expand to the Pacific.
"We are very excited about joining ADB's Trade Finance Program," said Mr. Yates. "Joining the program enables Kina to leverage the AAA international rating of ADB to add value to our client’s international trading activity. It also demonstrates ADB’s comfort with Kina's strong framework for managing the risks pertinent to international transactions."
Kina was formed in 2015 from the merger of Maybank (PNG) Limited and Kina Finance Limited. Kina is ranked fourth by size in PNG, accounting for about 3.0% of total banking sector assets.
The economy of PNG is heavily dependent on trade, with total exports of $6.7 billion in 2015 (about 32% of GDP) and total imports of $5.6 billion (about 27% of GDP). Key exports are gold, oil, palm oil, coffee, and cocoa. Key imports, meanwhile, include machinery and transport equipment, food, and fuels.
TFP, backed by ADB's AAA credit rating, provides guarantees and loans to over 200 partner banks to support trade, enabling more companies throughout Asia to engage in import and export activities. With dedicated trade finance specialists and a 24-hour response time, the program has established itself as a key partner in the international trade community, providing fast, reliable, and responsive support to fill gaps in the region’s most challenging markets.
TFP complements its financial support with a regular series of workshops and seminars to increase knowledge and expertise in trade finance products and operations, risk management, and fraud prevention.
Since 2009, TFP has supported more than 9,200 small and medium-sized businesses across developing Asia — through over 13,000 transactions valued at over $25.5 billion — in sectors ranging from commodities and capital goods, to medical supplies and consumer goods.
For more information, visit the TFP website: http://www.adb.org/tfp
ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, ADB is celebrating 50 years of development partnership in the region. It is owned by 67 members—48 from the region. In 2016, ADB assistance totaled $31.7 billion, including $14 billion in cofinancing.