The Asian Development Bank (ADB) welcomes the Japanese government’s initiative to facilitate trade finance through the Japan Bank for International Cooperation, cooperating with the ADB’s Trade Finance Facilitation Programme (TFFP). Japan’s Finance minister Shoichi Nakagawa announced the initiative on Saturday after a meeting in Rome of G7 finance ministers.
Under the TFFP, implemented in 2004, the ADB shares with commercial banks the risk of providing essential trade finance to exporters and importers in the region. Such firms, particularly in developing Asia, have long struggled to obtain the necessary trade finance to expand their businesses. The global financial crisis has further reduced the availability of finance that companies depend on for trade, exacerbating an already poor economic outlook.
Ensuring access to trade finance is crucial to countering the shock of the global downturn in international trade. The expansion of the TFFP will help to fill the gaps in trade financing left by a weak international financial sector. Promoting and widening provision of such financing will support economic development and regional integration in Asia. TFFP also plays an important role in the ADB’s efforts to develop public-private partnerships through risk mitigation.
“The government of Japan’s trade finance facilitation initiative aiming particularly at the region is a clear demonstration of the cooperation that is required during these difficult times,” said Haruhiko Kuroda, President of the ADB. “We are seeking to accelerate the trade finance support by boosting the size of the TFFP from US$150 million to US$1 billion.”