The Asian Development Bank and Citigroup will jointly provide more than $1.5 billion in trade finance to exporters and importers in Asia.
The multilateral lender and Citi have signed a "risk-sharing pact" that could provide over $1.5 billion through to 2013 to support trade in developing Asia.
"Under the Risk Participation Agreement, part of ADB's recently expanded Trade Finance Facilitation Program (TFFP), ADB and Citi will share the risk on trade finance advanced to exporters and importers in frontier markets in Asia," ADB said in a statement today.
The statement noted that the agreement comes at a time when the global financial crisis has significantly slowed the supply of trade finance, in particular to emerging market countries.
"Ensuring continued trade flows is key to helping developing countries boost economic growth and alleviate poverty," said Philip Erquiaga, who is the Director General of ADB's Private Sector Operations Department.
Started in 2004, TFFP offers loans and guarantees through international banks and developing member country banks to support trade. Transactions can range from short-term letters of credit to maturities of up to three years.
Erquiaga noted that partnerships between international and local banks enabled by the program can result in expanded trade finance lines and lead to knowledge exchange and technology transfer.
According to ADB, the program could provide up to $ 1.5 billion in trade finance by the end of 2013.
"Global trade has been significantly impacted by the international financial crisis and in entering into this agreement, Citi has demonstrated its commitment to companies in Asia Pacific’s more developing markets, now and in the future," said Ravi Saxena, who is the Managing Director, (Global Head of Trade Services and Asia Pacific Trade Head), Global Transaction Services at Citi.
