ADB, StanChart open $800-M SME window

MANILA, Philippines - Multilateral lender Asian Development Bank (ADB) and British financial giant Standard Chartered Bank  are teaming up to provide more than $800 million in financing for small and medium-sized enterprises (SMEs) in Asia.

The supply chain financing in Asia will be the first partnership of its kind under ADB’s recently launched Supply Chain Finance (SCF) program.

Specifically, the agreement will finance more than $800 million in supply chain transactions, most of which will be directed through SMEs that are supplying large companies with materials for intermediate and final production, as well as retail sales.

Under the agreement, ADB and Standard Chartered will share the risk in the transactions. This will in turn support the development of intra-Asia supply chains as well as supply chains between Asia and other regions of the world.

“Market gaps for supply chain finance impede economic growth and job creation, so it’s imperative that ADB get into this space,” ADB head of Trade Finance Steven Beck said.

“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,” he said.

Backed by its AAA credit rating, ADB’s SCF program complements its successful Trade Finance Program (TFP).

While ADB’s TFP fills market gaps by providing guarantees and loans to banks, the SCF program will take commercial corporate risk and improve liquidity within the supply chains.

“We are delighted to be partnering with ADB for its first supply chain risk-sharing program. This partnership is a testament to our strength in financing trade and our commitment to supporting trade flows – the lifeblood of the global economy,” said Joshua Cohen, Standard Chartered global head of liability and RWA management.

As part of the Clinton Global Initiative, Standard Chartered has also pledged to increase SME lending by approximately 45 percent in its footprint markets of Asia, Africa and the Middle East over the next five years.