Two Indonesian banks have signed trade financing agreements with the Asian Development Bank (ADB), a move that will help them provide crucial support to their local exporters and importers.
The agreements, signed by PT Bank Mandiri (Persero) and PT Bank Muamalat Indonesia are part of ADB's trade finance facilitation programme (TFFP) and are the first such agreements signed by Indonesian banks.
"These agreements with ADB will make it easier for Indonesian banks to extend trade financing," says James Nugent, country director of ADB's Indonesia resident mission. "Easier access to trade finance will help Indonesian companies at a time when external trade is gradually recovering from the effects of the global financial crisis."
Under the US$1bn TFFP, which started operations in 2004, the AAA-rated ADB provides finance and guarantees through, and in conjunction with, international banks and banks in ADB's developing member countries. By attracting private sector financing, and because the portfolio can roll over once a year, the programme could generate US$15bn in trade finance through 2013.
"Participating in ADB's trade finance programme will connect those Indonesian banks and their clients more closely in global banking, trade and business networks, which should ultimately reap rewards in terms of higher domestic and world economic growth," comments Philip Erquiaga, director general of ADB's private sector operations department, which oversees the TFFP.
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