India’s Axis Bank has signed an agreement with the Asian Development Bank (ADB) to enable it to provide more supply chain finance to small and medium-sized enterprises, with a focus on ESG and priority sectors.

The deal, which takes the form of a partial guarantee facility agreement under the ADB’s Trade and Supply Chain Finance Programme (TSCFP), will see the ADB provide guarantees to the lending done by Axis Bank to support supply chain financing for impact sectors. The agreement is scalable, with an initial foundational ramp up of nearly US$150mn.

“This milestone project is ADB’s first supply chain finance transaction in India, and we are happy to partner with Axis Bank, which shares similar values in promoting sustainable supply chains in the region,” says Steven Beck, head of trade and supply chain finance at the ADB. “ADB’s expansion of our supply chain finance programme in India can contribute to our shared interest in developing business growth that addresses environmental, social, and governance priorities.”

The agreement covers various supply chain financing product variants, including one-year working capital demand loans. With the terms of engagement being perpetual and open-ended, Axis Bank says it has the flexibility to add further products as supply chain financing evolves over time.