Trade and Supply Chain Finance Program (TSCFP)

TSCFP works to make global trade and supply chains green, resilient, inclusive, transparent, and socially responsible.

Trade Finance (TF)

The TF business of ADB's Trade & Supply Chain Finance Program (TSCFP) fills market gaps for trade finance by providing guarantees and loans to banks. TF continues to grow, supporting billions of dollars of trade throughout the region, which in turn helps create sustainable jobs and economic growth in Asia’s developing countries.

In 2023, TSCFP’s trade finance business supported 21,416 transactions worth a total of $4.7 billion, including $2.9 billion in co-financing. TSCFP’s work helped 6,900 small and medium-sized enterprises and enabled 1,300 transactions between ADB Developing Member Countries.

 

Trade Finance Financial Products

Trade finance works exclusively through banks. The reason for this is two-fold:

  • Banks are important intermediaries in trade and ADB does not want to displace them. It wants to support and broaden their ability to act as intermediaries, especially in the most challenging markets;
  • ADB does not have the staff and extensive branch network of banks, so from a practical perspective ADB works with financial intermediaries (banks), leveraging resources, and complementing respective areas of strength.

Credit Guarantee (CG)

ADB issues a CG in favor of confirming bank covering up to 100% of issuing bank risk within 24 hours of request. More than 75% of Trade Finance Program's portfolio is generated through this product.

Sample transaction:

Guarantee to a bank in Germany covering 100% of a $600,000 payment risk on an Azerbaijan bank supporting import of fruit and vegetable drying equipment.

Flow Chart: Credit Guarantee

Revolving Credit Facility

ADB provides loans directly to issuing banks in Trade Finance Program countries of operation to support pre-shipment and post-shipment trade transactions.

Sample transaction:

$250,000 trade loan to a Sri Lanka bank to on-lend pre-export finance for the manufacture of garments for export to Europe and India.

Flow Chart: Revolving Credit Facility

Risk Distribution (Cofinance)

ADB enters into a risk distribution agreement with insurers, export credit agencies, and other entities developing credit appetite in Trade Finance Program countries distributing and sharing issuing bank risk with them to leverage capital resources and credit limits.

Sample transaction:

Cofinance and share risk with distribution partners in all TFP countries.

Flow Chart: Risk Distribution (Cofinance)

 

How to Join Trade Finance

 

Join TF as an Issuing Bank

TF is open to qualified banks located in ADB’s developing member countries. There are no fees to join the program. Eligible issuing banks should sign an Issuing Bank Agreement.

The qualification criteria to be an issuing bank include:

  • positive financial statements
  • strong corporate governance
  • clear and balanced stakeholder structure
  • existing trade finance operations

Advantages in joining TF as an issuing bank include:

  • increased credit lines
  • expanded relationships with correspondent banks
  • reduced cash collateral requirements
  • enhanced ability to maintain or attract new clients
  • critical support during times of crisis

Interested? Reach out to the TFP Team.

 

Join TF as a Confirming Bank

Confirming banks are in a key position to support more business for exporting clients, especially in countries where credit lines are limited.

TF is open to qualified international, regional, and local banks worldwide. Interested banks are required to provide information on their anti–money-laundering (AML) and know-your-client (KYC) policies. Eligible confirming banks should sign a Confirming Bank Agreement. There are no fees to join.

Advantages in joining TF as a confirming bank include:

Interested? Reach out to the TFP Team.

 
Photo: Asian Development Bank​

The ADB and IFC Sustainable Trade Finance Reference Note

This reference note will help stakeholders in the global trade finance market to better understand eligibility requirements for trade deals that can be qualified as sustainable, subject to review of detailed circumstances by ADB and IFC.

 

Trade Finance Highlights

2023: By the Numbers

$0 billion

value of transactions supported

$0 billion

ADB commitments

$0 billion

in cofinancing

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transactions supported

0

transactions supporting SMEs

Summary