DUSHANBE, February 2, 2010, Asia-Plus — Specialists from the Private Sector Operations Department, Asian Development Bank (ADB), yesterday met here with senior representatives from five commercial banks of Tajikistan to discuss introduction of the Trade Finance Facilitation Program (TFFP) in Tajikistan.
Mr. Steven Beck, Head, Trade Finance, Private Sector Capital Markets, ADB, noted that loans and guarantees would be provided through international banks to banks in developing member countries (DMCs) to back trade transactions.
It is not easy for companies in developing countries to get loans, necessary for export and import transactions and in many countries, this impedes development of new sectors and general economic growth, Mr. Beck noted.
According to him, many companies in Tajikistan, like other developing countries, are doing their utmost to get finance for their trade transactions and facilitation of access to these loans will support long-term development of the country’s economy.
Speaking at the meeting, Mr. Makoto Ojiro. Country Director, ADB Tajikistan Resident Mission, noted that in addition to providing the finance, the program links banks and firms in developing economies into global trading and banking networks. This builds relationships and spurs knowledge sharing that will help banks and their clients in the longer term.
“TFFP will help Tajik banks and companies strengthen business relations in the Central Asian region and with the whole world,” Mr. Ojiro noted.
Set up in 2004, the Trade Finance Facilitation Program (TFFP) is the first region-wide program undertaken by the ADB aimed to help banks in developing member countries (DMCs) provide trade finance products to importers and exporters. The TFFP helps Asian countries maintain, re-establish and enhance trade finance lines. The TFFP provides guarantees to confirming banks and revolving credits to issuing banks located in DMCs; enhances banks” abilities to offer importers and exporters access to financial services; and works in partnership with the private sector to provide capacity, liquidity and stability to the trade finance system. The TFFP has two main products: Credit Guarantee (CG) Product (ADB provides guarantees to participating regional and international banks (Confirming Banks) against the payment of trade credits issued by approved Issuing Banks) and Revolving Credit (RCF) Product (ADB provides loans to Issuing Banks for on-lending to private sector exporters and importers, many of which are small and medium-sized enterprises (SMEs), to finance trade-related transactions).
According to information posted on the ADB website, the TFFP was expanded to a $1 billion program in March 2009 after ADB perceived a growing and urgent need to help address the lack of finance that was holding back trade, particularly in developing economies. In the first 10 months of 2009, the program supported over $1.3 billion in trade, a 125% increase over the $578 million that it supported in 2008.
