The Asian Development Bank (ADB) has agreed to share half the risk of the Bank of Georgia’s supply chain finance transactions, with the aim of boosting financing for SMEs.
The multilateral lender says it is the first time it has struck a deal of this kind, which will see the two institutions enter into a risk-sharing deal for corporate non-payment in supply chain finance arrangements.
“This agreement builds on our trade finance partnership with the Bank of Georgia that started in 2011 and will be catalytic in developing supply chain finance in the region,” says Steven Beck, head of the ADB’s trade and supply chain finance programme (TSCFP).
“By promoting supply chain finance with our partner banks, we help small and medium-sized businesses in developing Asia to participate in global supply chains, spur economic growth, and contribute to job creation.”
The ADB describes the agreement as the culmination of two years of technical assistance provided by the TSCFP to the Bank of Georgia.
Zurab Masurashvili, head of the Tblisi-headquartered lender’s small and medium business department, says: “SMEs are especially important for the Bank of Georgia, and this agreement aims to further strengthen them and help them to explore new markets.”
The TSCFP provides loans, guarantees and technical know-how to other financial institutions across Asia to facilitate trade finance transactions, with a mandate to encourage resilient, sustainable and socially responsible trade.
In April the ADB announced its first supply chain finance deal in India, agreeing to partially guarantee supply chain finance transactions carried out by Axis Bank.
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