The Trade Finance Program and Its Role in Lifting Impediments to Trade | Asian Development Bank

The Trade Finance Program and Its Role in Lifting Impediments to Trade

Publication | August 2017
The Trade Finance Program and Its Role in Lifting Impediments to Trade

This brief looks at the trade enhancement potential of fintech, issues that need to be addressed to bridge gaps in trade finance, and implications for banks around the world.

Trade finance markets are huge, estimated to be $10 trillion yearly, supporting trade valued at $18 trillion per year. A $1.6 trillion gap is therefore significant especially for SMEs in developing countries, known for creating a high proportion of new jobs, particularly in smaller communities.

This brief presents the various trade finance programs and initiatives of ADB to bridge gaps in trade finance, such as the Supply Chain Finance Program which provides support to small and medium-sized enterprises. The paper also presents highlights from ADB's 2016 trade finance survey to demonstrate the direct role of trade finance in the economy and in society, and the exciting potential advances in digital trade.

Key Points

  • Fundamental changes in global trade flows, driven by geopolitical and economic shifts, have generated a fulsome response from the Asian Development Bank (ADB) and its Trade Finance Program (TFP), in terms of the products and services offered to ensure that local banks in developing Asia benefit from those changes.
  • Through the TFP and in collaboration with its trade finance partners, ADB intends to bridge gaps in trade finance and provide a level playing field for small and medium-sized enterprises by promoting job creation and sustained economic growth in the 21 countries where the TFP operates.
  • Much attention is now focused on the trade enhancement potential of various technological advances. This brief looks at early developments, the issues that still need to be addressed, and the implications for banks around the world.