Supply chain finance can be an important tool to close market gaps for the drastically underserved small and medium-sized companies (SMEs). To build awareness and promote uptake of supply chain finance in developing member countries (DMCs), ADB's Trade and Supply Chain Finance Program (TSCFP)uses technical assistance, knowledge products, and capacity building initiatives with stakeholders, including governments (for appropriate regulatory environment) and financial institutions to deliver benefits to SMEs.


Steven Beck: Hi there! Welcome to “The 3-Minute Brief.” This is an episode of a series of 3-minute briefs describing what ADB’s Trade and Supply Chain Program is doing to make global trade and supply chain GREEN, RESILIENT, INCLUSIVE, SOCIALLY RESPONSIBLE, and TRANSPARENT.

Steven Beck: And joining us is Sunil Mascarenhas to talk about supply chain finance. Sunil, how are you? 

Sunil Mascarenhas: I’ve been well, how are you? 

Steven Beck: I am well thank you.  

Steven Beck: What is Supply Chain Finance? Could you describe that easily for us? 

Sunil Mascarenhas: Steven, Supply Chain Finance is about providing working capital cash to smaller companies to enable them to grow and create more jobs. Smaller companies have historically faced hurdles in accessing bank finance and SCF is an innovative way to provide bank finance to these companies by looking at them as part of a supply chain. 

Steven Beck: Sunil, what’s a multilateral development bank doing in this space. It sounds like sort of a commercial kind of business. Why is a multilateral involved in supply chain finance? 

Sunil Mascarenhas: ADB’s participation actually enhances the capacities of these banks to increase lending to SMEs and therefore providing more cashflows to the SMEs concerned. 

Steven Beck: And what is it that the multilaterals bring to that arrangement? Is just the guarantees and loans? To back more financing for small and medium-sized businesses? 

Sunil Mascarenhas: From ADB’s perspective, ADB’s social and environmental safeguards expertise provides tremendous value for these banks in integrating ESG practices alongside their commercial activities.  

Sunil Mascarenhas: Let me give you an example, we recently engaged with one of our partner banks to support aquaculture food manufacturing supply chain in Indonesia. Now the financing was typically very easy and so was the guarantee, but the difference of the deal was essentially about assessing the environmental footprint of that particular company and the suppliers and how would the suppliers get certified to environmental standards?  

And here’s where colleagues from ADB from different units from the Safeguards, etcetera, came together and actually assisted the company in designing a sustainability framework for their suppliers. So that’s the value we added in the deal. 

Steven Beck: Sunil, thank you very much for providing that overview of Supply Chain Finance.  

 And thank you ladies and gentlemen for watching this episode of “The 3-Minute Brief.”