MANILA, PHILIPPINES - The Asian Development Bank (ADB) today signed trade finance agreements with Bank of Georgia and TBC Bank that are expected to bolster the trade sector and Georgia's role as a strategic hub between Europe and Asia.

The agreements, the first such agreements that ADB has signed in the central Asian country, are part of ADB's Trade Finance Program, which provides guarantees and loans through banks to support international trade in ADB's developing member countries.

Georgia sits at the crossroads between the vast markets of Europe and Asia and is well-placed to benefit from growing trade between the two regions as the global economy rebalances. However, it can only do that if there is an increase in scarce trade finance from Georgian and other banks to allow local companies to import goods they need and export other products.

"The trade finance agreements should help firms, including small- and medium-sized enterprises, to access key financing and do more business. In turn, that boosts employment, promotes economic growth, and enhances the country's international trade links," said Lakshmi Venkatachalam, ADB's Vice-President for Private Sector and Cofinancing Operations, who attended the signing ceremony.

In Georgia, small- and medium-sized enterprises employ less than 40% of the country's total workforce - less than in many other developing countries - partly due to their inability to access financing. That has hindered their expansion.

In 2010, ADB's Trade Finance Program supported trade transactions worth $2.8 billion, a 47% increase from $1.9 billion in 2009. Of the total 783 transactions, just over 270 involved smaller firms in the region. Since it started operations in 2004, it has supported $5.2 billion in trade. Half of the outstanding portfolio supports transactions between ADB developing member countries.

ADB, which has a triple A credit rating, will continue to expand the reach of the program in 2011 to support intraregional trade and economic integration. Over 200 banks are already part of the program, including institutions in Central Asia's Azerbaijan, Uzbekistan, and Tajikistan.

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