The Asian Development Bank (ADB) and Deutsche Bank signed a risk participation agreement to enhance access to financing for small and medium-sized enterprises (SMEs) in Asia and the Pacific.
The agreement was signed between ADB’s Trade and Supply Chain Finance Program (TSCFP) and Deutsche Bank AG through its Singapore branch, said a release of ADB on Tuesday.
The agreement will enhance Deutsche Bank’s ability to support SMEs and other corporate clients by releasing more capital for use in key economic sectors in the region, like pharmaceuticals and agriculture, added the release.
Read: Global trade finance gap expands to 2.5 trillion USD in 2022: ADB
“Partnering with Deutsche Bank will allow companies, particularly SMEs, to access the global supply chain which can spur economic growth and contribute to job creation,” said ADB’s Director General for Private Sector Operations Suzanne Gaboury. “Partnerships like this one allow ADB to catalyze the private sector and mobilize capital for trade transactions that support development across the region.”
Supply chain finance is critical to increasing trade by providing working capital to suppliers by leveraging their relationships with larger corporates. With short-term revolving facilities for supply chain finance transactions, this partnership has the potential to support more than 200 million U.S. dollars in additional trade in Asia and the Pacific each year.
Read: BIMSTEC Summit: High-profile Bangladesh business delegation to visit Thailand in November
“We are proud to partner with ADB on this important initiative. Together, we will help smaller companies achieve growth through better access to supply chain financing. We believe this is important, as we are seeing increasing demand for this in the trade sector,” said Deutsche Bank Head of Trade Finance and Lending for Asia Pacific Matthew Moodey.
TSCFP is helping banks in Asia and the Pacific improve their ability to provide supply chain finance, particularly to SMEs. It is working to make global trade and supply chains green, resilient, inclusive, transparent, and socially responsible.