ADB, Citi to offer $1.5 bn in trade finance to Asian mkts

MANILA/NEW DELHI: The Asian Development Bank and Citigroup will jointly provide more than $1.5 bn 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 bn 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.