Earlier this week, the Asian Development Bank (ADB) signed separate trade finance agreements with five of the principal Azerbaijani banks in order to make trade credit more easily available in the country. The agreements, which fall under ADB´s Trade Finance Facilitation Programme (TFFP), are aimed at promoting the further insertion of local companies in international trade through credit and financial assistance, developing a production matrix more integrated with regional and global markets.
The TFFP scheme consists of loans and guarantees offered by the ADB in conjunction with its local partners to foster international trade transactions. The following banks were party to the agreement: the Accessbank; the Azerigazbank; the Bank Respublika; the Demirbank OJSC; and, the Open Joint Stock Company "Bank of Baku”.
The TFFP fund was expanded in early 2009 to US$ 1 billion to facilitate the development of trade flows in developing countries of the region who are members of the ADB. Throughout 2009 the TFFP provided financial help for international transactions to over 263 small and medium-sized companies in the region, supporting transactions valued at more than US$ 1.9 billion.
Small and medium-sized companies (SMEs) are the largest employers in most Asian developing countries, making it even more important to support their international insertion and promote the creation of trading partnerships among them. The TFFP thus complements the efforts of the Central Asia Regional Economic Cooperation (CAREC) programme to boost economic growth in the region by enhancing transport, energy and trade facilities.
Banks in four of ADB´s member countries (Afghanistan, Azerbaijan, Mongolia, and Uzbekistan) already participate in the TFFP, but this number is expected to expand with the signing of further agreements in other countries later in 2010.