ADB, DBS Sign Agreement for SME Supply Chain Support

Manila: The Asian Development Bank (ADB) and DBS Bank of Singapore have signed an agreement to help small and medium-sized enterprises (SMEs) in developing countries of Asia and the Pacific to participate in global supply chains.
 
The risk participation agreement will support supply chain finance products such as pre-shipment finance and post-shipment finance, as well as working capital loans, all of which are vital for smaller companies operating in global trade networks.
 
"Supply chain finance is critical to boosting support to SMEs and therefore the growth that creates jobs to improve peoples lives," said ADB Trade and Supply Chain Finance (TSCFP) Head Steven Beck in a press release on Thursday.

"We’re delighted to sign this agreement with DBS, which strengthens our partnership in closing SME financing gaps and supporting closer trade ties with developing countries in the region," he added.
 
The TSCFP’s 2021 Trade Finance Gaps, Growth, and Jobs Survey estimated that the funding gap for trade finance grew to $1.7 trillion in 2020 from $1.5 trillion in 2018. Smaller companies were the worst affected, receiving 52% of rejections despite making only 41% of the requests for trade finance. Women-led companies fared particularly badly, with about 70% of their applications for trade finance totally or partially rejected.
 
"Our partnership with ADB aligns with DBS’ commitment to help SMEs build resilience in these challenging times and reduce the working capital gap," said DBS Bank Group Head of Product Management Sriram Muthukrishnan. 
 
"As a leading provider of global transaction services, we are delighted to contribute our experience and expertise, with integrated solutions in trade finance, cash management, and working capital advisory, powered by our innovative digital capabilities," he added.
 
Backed by ADB's AAA credit rating, TSCFP provides loans and guarantees to more than 200 partner banks to support trade, creating import and export opportunities for enterprises across Asia and the Pacific.
 
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