Citi Inks $100 Million Trade Finance Deal With Asian Development Bank

Global financial institution Citi is expanding its existing partnership with the Asian Development Bank (ADB) to share risk in trade finance transactions, reports in The Financial said Friday (May 11).

The ADB’s Trade Finance Program reached a deal worth $100 million with Citi that sees the financial institutions (FIs) sharing risk on trade finance transactions in an effort to bolster support for trade and access to finance across Asia.

“ADB’s continuing partnership with Citi will help to address the funding needs of small and medium-sized enterprises for trade finance, which will promote growth and job creation in Asia,” said ADB Head of Trade and Supply Chain Finance Steven Beck in a statement. “We are pleased with the renewed agreement with Citi to address the trade finance gap.”

Data published last September from the Asian Development Bank pegged the current trade finance gap at $1.5 trillion, noting that this lack of financing disproportionately affects small businesses (SMBs). Its analysis also found that the rise in alternative and marketplace lending options in the market has not yet made a significant impact on SMBs’ ability to access trade finance products.

The Trade Finance Program collaborates with more than 200 partner banks to provide guarantees and loans for trade finance. According to the FIs, the program has facilitated more than $30 billion in trade finance to SMBs across Asia since its launch in 2009.

“As one of the world’s leading global trade banks, Citi is pleased to support this initiative to help fund trade flows with multinationals as well as SMEs in and out of developing markets,” added Citi Treasury and Trade Solutions Global Trade Head John Ahearn in another statement. “By introducing this new product and continuing our collaborating with ADB, we look forward to furthering our mission of enabling growth and economic progress.”

While Citi retreated its payments processing operations from the Asian market in 2016, the FI has since increased its corporate banking operations across Asia-Pacific with a particular focus on trade finance.