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ADB, Bank of Georgia Sign Milestone Risk Sharing Agreement for Supply Chain Financing

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TBLISI  — The Asian Development Bank (ADB) and the Bank of Georgia (BOG) have signed a risk-sharing agreement to promote supply chain finance in Georgia.

Through the agreement, the first of its kind for ADB, the BOG and ADB’s Trade and Supply Chain Finance Program (TSCFP) will share corporate risk for supply chain transactions on a 50%-50% basis. The agreement is the culmination of 2 years of technical assistance provided by TSCFP to BOG.

“This agreement builds on our trade finance partnership with BOG that started in 2011 and will be catalytic in developing supply chain finance in the region,“ said TSCFP Head Steven Beck. “By promoting supply chain finance with our partner banks, we help small and medium-sized businesses in developing Asia to participate in global supply chains, spur economic growth, and contribute to job creation.”

Supply chain finance provides working capital to suppliers including small and medium-sized companies (SMEs) by leveraging their relationships with larger corporates. ADB estimates the gap between demand for trade finance and the money available is at least $2 trillion, with SMEs the worst affected. ADB’s TSCFP provides training and other technical assistance to banks across developing Asia to bring them up to speed on international best practices for the provision of supply chain finance.

“SMEs are especially important for the Bank of Georgia, and this agreement aims to further strengthen them and help them to explore new markets,” said Bank of Georgia’s Head of Small and Medium Business Department Zurab Masurashvili.

Backed by ADB’s AAA credit rating and working with more than 250 partner banks, TSCFP enables trade and supply chains with loans and guarantees that underpin economic growth and create jobs to improve people’s lives. TSCFP initiatives help make global trade and supply chains green, resilient, inclusive, transparent, and socially responsible.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.