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Regional: Trade Finance Program (Additional Financing)

Nonsovereign (Private) Project | 37909-027 Status: Approved

The Trade Finance Program (TFP) reduces market gaps for trade finance by providing guarantees and loans to banks to support trade. As the single largest mobilizer of cofinance at ADB, TFP draws the private sector to close markets in developing member countries where otherwise they may not operate. Leveraging off its transactional work, TFP also closes gaps through knowledge products, providing valuable information to the private sector that enables them to operate in developing Asia.

 
Project Name Trade Finance Program (Additional Financing)
Project Number 37909-027
Borrower/Company
Country Regional
Location Regional
Type or Modality of Assistance
2033 Guarantee Ordinary capital resources USD 0.00 Approved
2033 Loan Ordinary capital resources USD 0.00 Approved
Strategic Agendas Inclusive economic growth
Regional integration
Drivers of Change Governance and capacity development
Knowledge solutions
Partnerships
Private sector development
Sector / Subsector

Finance / Trade finance

Industry and trade / Industry and trade sector development

Gender Equity and Mainstreaming Some gender elements
Responsible ADB Department Private Sector Operations Department
Responsible ADB Division Private Sector Financial Institutions Division
Responsible ADB Officer Beck, Steven
Project Sponsor(s)
Description The Trade Finance Program (TFP) reduces market gaps for trade finance by providing guarantees and loans to banks to support trade. As the single largest mobilizer of cofinance at ADB, TFP draws the private sector to close markets in developing member countries where otherwise they may not operate. Leveraging off its transactional work, TFP also closes gaps through knowledge products, providing valuable information to the private sector that enables them to operate in developing Asia.
Objectives and Scope The Trade Finance Program (TFP) closes market gaps for trade finance by providing guarantees and loans to partner banks to support trade. Drawing the private sector into developing countries is important to closing gaps and TFP is the biggest mobilizer of private sector financing at ADB. In addition to doing transactions TFP provides a number of 'knowledge products' which contribute to closing financing gaps. More information can be found at www.adb.org/tfp.
Status of Development Objectives (i) Total trade transactions supported 2009-2017: 16,607; (ii) Intra-regional transactions 2009-2017: 12,654 (inclusive of 'Total trade' figure); (iii) Bilateral trade transactions between DMCs supported 2009-2017: 3,809 (inclusive of 'Total trade' figure); (iv) SME transactions 2009-2017: 12,055 (inclusive of 'Total trade'); (v) Total value of trade supported 2009-2017: $30 billion; (vi) Cofinancing mobilized 2009-2017: $17.8 billion (inclusive of 'Total value' figure); (vii) In-country seminars and/or training conducted 2012- 2017: 23; (viii) TFP created the world's first default and loss statistics in trade finance - The Trade Finance Register - which is now managed by the International Chamber of Commerce; (ix) For more information, please see www.adb.org/tfp
Status of Operation/Construction Market demand for TFP continues to grow. -40% growth in TFP in 2017 compared with the previous year - 3,505 transactions in 2017 - $4.5 billion total value of trade supported in 2017 - $2.8 billion cofinancing mobilized in 2017 (inclusive of $4.5 billion total value figure above) - Of TFP's 21 countries of operation, five most active are: Armenia, Bangladesh, Pakistan, Sri Lanka and Viet Nam. - 2,822 SMEs supported in 2017 - TFP never had a default or loss. - TFP was first to quantify global trade finance gap through its Trade Finance Gaps, Growth and Jobs survey. - TFP's Gender Initiative looked at human resource policies at partner banks to recommend enhancements that would attract, retain and promote more women in banking. Many of the recommendations have been implemented. - TFP provides on-line training in trade finance to partner banks, as well as numerous in-person trainings on risk management, anti-money laundering and safeguards. - For more information please see www.adb.org/tfp
Linkage to Country/Regional Strategy The importance of short-term finance to support global trade - known as trade finance - is explicitly recognised in the Addis Ababa Action Agenda on Financing for Development ( Addis Agenda ) as an important means of implementation of the Sustainable Development Goals (SDGs). Yet, ADB' s Trade Finance Gaps Growth and Jobs survey launched in September 2017 confirmed a global trade finance gap of $1.5 trillion, and determined that 40% of this gap is in Asia and the Pacific, with 74% of rejected trade finance transactions coming from SMEs. The program supports two pillars of ADB s operational focus cited in the Midterm Review of Strategy 2020: (i) poverty reduction and inclusive growth, and (ii) regional cooperation and integration.
Safeguard Categories
Environment FI-C
Involuntary Resettlement FI-C
Indigenous Peoples FI-C
Summary of Environmental and Social Aspects
Environmental Aspects FI (treated as category C)
Involuntary Resettlement FI (treated as category C)
Indigenous Peoples FI (treated as category C)
Stakeholder Communication, Participation, and Consultation
Timetable for assistance design, processing and implementation
Concept Clearance -
Credit Committee Meeting -
Approval 08 Jun 2018
Last PDS Update 12 Jun 2019

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