The $350 million additional financing will help small business such as this mini store in Vietnam. The financing will help close large market gaps for trade finance that impede growth and job creation in the Asia and Pacific region. The Asian Development Bank (ADB) has approved $350 million in additional headroom to further expand the scope and impact of its Trade Finance Program (TFP), helping to close large market gaps for trade finance that impede growth and job creation.

TFP, which supports more than 12,000 small and medium-sized enterprises (SMEs) in developing Asia since 2009, helps reduce market gaps for trade finance by providing loans and guarantees to financial institutions to support trade activities in the region.

The additional financing will increase TFP’s limit to $1.35 billion, keeping up with the increasing market demand for trade finance from the program, which grew over 50 percent in 2017. TFP is able to support trade financing well above its limit over the course of a year—but not breaching the limit at any one point in time—by recycling transactions with short maturities and leveraging cofinancing.

“The increased headroom approved today by ADB’s Board of Directors will help us meet the huge surge we’ve seen in market demand for our trade finance products,” ADB’s Head of Trade and Supply Chain Finance Steven Beck said.

“It is an exciting time for the team, which is known for its excellent client services, including transaction processing in 24–48 hours,” he added.

Financial institutions in support of trade as well as SMEs play an important role in closing the global trade finance gap, which amounts to $1.5 trillion globally, 40 percent of which is coming from the Asia and Pacific region, according to ADB’s latest Trade Finance Gap survey.

Trade finance is also an important component for countries to achieve the Sustainable Development Goals, as identified by the United Nations’ Addis Ababa Declaration on Financing for Development.

TFP has guaranteed or funded 5,583 transactions in 2016 and 2017 alone, valued at $7.6 billion, with cofinancing reaching $4.6 billion.

The program’s transaction growth remained robust in the first four months of 2018—comprised of 1,453 transactions valued at over $2 billion, $1.3 billion of which was cofinanced with the private sector.

Mobilizing private sector resources is an important metric for ADB as it leverages resources and multiplies the bank’s ability to reduce market gaps that impede growth and job creation in its developing member countries.

The additional financing to TFP will complement the $100 million in additional support approved by ADB’s Board of Directors in March to extend and expand the scope of the bank’s Supply Chain Finance Program, which helps SMEs access finance and boosts their contribution to the region’s economic growth and development.

TFP currently operates in 21 ADB member countries, with the top five most active markets including Armenia, Bangladesh, Pakistan, Sri Lanka, and Viet Nam.

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