The latest news says the Asian Development Bank (ADB) has signed a supply chain finance deal with the Bank of Georgia to share around 50% of its risks related to supply chain finance transactions with the main purpose of strengthening financing and reducing supply chain management risks for SMEs.
As per ADB, this is the very first time it has signed such a type of arrangement, which will bring two institutions together to determine a risk-sharing program for avoiding the risks of corporate non-payment in supply chain finance transactions.
Steven Beck, head of the ADB’s trade and supply chain finance program (TSCFP) stated, “This deal expands our trade finance partnership with the Bank of Georgia that started in 2011 and will be stimulant in growing supply chain finance in the area.”
He further added, “By encouraging supply chain finance with our associate banks, we can help small and medium-sized businesses in developing Asia to enter into global supply chains, promote economic development, and provide aid to employment.”
The ADB portrays the arrangement as the summit of two years of technical help given by the TSCFP to the Bank of Georgia.
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Zurab Masurashvili, head of the Tblisi-headquartered lender’s small and medium business department stated, “SMEs are particularly significant for the Bank of Georgia, and this arrangement intends to additionally reinforce them and assist them with investigating new business sectors.”
The TSCFP facilitates credit, guarantees, and technical guidance to other financial institutions across Asia to aid trade finance transactions, with an acceptance to support strong, sustainable, and socially responsible trade.
In April the ADB declared its first supply chain finance deal in India, consenting to specifically ensure supply chain finance transactions executed by Axis Bank.