MANILA, PHILIPPINES - ADB and the Inter-American Development Bank (IDB) have agreed to share access to their trade finance programs, linking more than 100 financial institutions to support trade between companies in Asia and the Pacific and Latin America and the Caribbean.Banks are important export-import intermediaries, so the agreement to link financial institutions that participate in the ADB and IDB Trade Finance Facilitation Programs (TFFP) should bolster trade, hitherto very low, between their respective regions. In turn, increased commercial flows will provide a foundation for further economic growth, job creation and poverty reduction.
"By linking the programs, we will help participating banks and their customers to diversify their business along a south-south axis, which is especially important at a time when the North American and European economies are facing difficult times," said Philip Erquiaga, Director General of the ADB's Private Sector Operations Department.
Hans Schulz, General Manager of the IDB's Structured and Corporate Finance Department, said: "This is an important step in our efforts to further strengthen cooperation among multilateral development banks as it will leverage the benefits of our trade finance programs
across the Pacific."
The trade finance facilitation programs provide loans and guarantees for export-import operations. ADB and the IDB recently expanded their respective programs to $1 billion in response to a decline of trade finance in the broader market. By attracting private-sector capital through risk-sharing, and because the lending can be rolled over, the support offered under the TFFPs is multiplied several times.
ADB, based in Manila, is dedicated to reducing poverty in the Asia and Pacific region through inclusive and environmentally sustainable economic growth and regional integration. Established in 1966, it is owned by 67 members - 48 from this region. In 2008, it approved $10.5 billion of loans, $811.4 million of grant projects, and technical assistance amounting to $274.5 million.
The Washington, DC-based IDB is the leading source of multilateral lending for Latin America and the Caribbean, partnering with governments, companies and civil society organizations from its 48 member countries. It also provides research and advice in key areas such as poverty reduction, infrastructure, energy, education and urban and rural development. In 2008 the IDB approved $11.2 billion in loans and guarantees as well as $378 million in grants and