The Asian Development Bank (ADB) has brought together its trade finance programme (TFP) and its supply chain finance programme (SCFP) into one unit, as it seeks to respond to the Covid-19 pandemic.

The ADB’s TFP works with over 200 partner banks to provide companies with the financial support they need to engage in import and export activities in Asia’s most challenging markets. While it has onboarded partners in most of the ADB’s member countries, its supply chain finance (SCF) counterpart, launched in 2015, has operated in a more reserved fashion. By bringing the two programmes together into one trade and supply chain finance programme (TSCFP), the ADB hopes to ramp up its SCF activity to further complement its trade finance initiatives.

“We’ve stepped back to take a strategic look at both businesses moving into the next phase of the crisis and beyond,” says Steven Beck, head of trade and supply chain finance at the multilateral development bank. “We see, partly through the experience of this crisis, the strong connection between trade and supply chains and the related gaps that we are trying to fill. We want our business to mirror that relationship and we think a more holistic approach to what we do will better support banks in helping their clients.”

While the TFP supports trade by assuming bank risk, the SCFP takes on corporate and SME risk. As part of the changes, the ADB’s TFP relationship managers will now cover both products. Beck tells GTR that through the TSCFP, the ADB is now in the process of introducing “deep-dive technical assistance” to local banks in markets where supply chain finance is not yet regularly used. “After three to four quarters of this technical assistance, we expect they’ll be ready to share risk with the ADB in SCF transactions,” Beck says.

The ADB says it also plans to work with governments to implement regulatory changes in several markets in order to overcome barriers to the use of supply chain finance across the region in which it operates.