9 January 2014 | Gurjit Degun
The Asian Development Bank (ADB) has teamed up with Standard Chartered Bank to support supply chain financing in Asia.
ADB expects the agreement to finance more than $800 million (£486 million) in supply chain transactions. It said that most of this will be directed through small and medium-sized enterprises (SMEs) supplying large companies.
ADB and Standard Chartered Bank will share the risk in transactions. This will support the development of intra-Asia supply chains, as well as supply chains between Asia and other regions of the world, ADB explained.
It is the first partnership of its kind under ADB’s recently launched supply chain finance (SCF) programme. SCF aims to offer an efficient means of managing financial supply chains to improve access to affordable working capital. ADB said in some cases it would also provide access to finance for companies in developing member countries that would otherwise not be considered as bankable.
“Market gaps for supply chain finance impede economic growth and job creation, so it is imperative that ADB gets into this space,” said Steven Beck, ADB's head of trade finance. “ADB is very pleased to sign this agreement with Standard Chartered to close market gaps in support of SME development and job creation in developing Asia."
Joshua Cohen, Standard Chartered’s global head of liability and risk-weighted assets management, added: “This partnership is a testament to our strength in financing trade and our commitment to supporting trade flows – the lifeblood of the global economy.”