The FINANCIAL — The Asian Development Bank (ADB) and Deutsche Bank AG on November 22 announced an agreement to enter into a supply chain finance (SCF) transaction under ADB’s Supply Chain Finance Program (SCFP).
The SCF will provide over $200 million in annual financing to small and medium-sized enterprises (SMEs) across developing Asia.
The program will support SME suppliers to United Arab Emirates-headquartered Landmark Group, a major retailer in the Middle East. Most of the suppliers who benefit from the arrangement are located in Bangladesh, the People’s Republic of China, India, Sri Lanka, and Viet Nam, according to ADB.
“This deal under our SCFP with Deutsche Bank to support Landmark’s SME suppliers in developing Asia is really exciting for us,” said Steven Beck, Head of Trade and Supply Chain Finance at ADB. “We appreciate Deutsche Bank and Landmark’s partnership and look forward to replicating the arrangement in more supply chains.”
While the SCFP provides guarantees in supply chain finance structures, its scope also covers funded supply chain financing as well. ADB and Deutsche Bank’s partnership will enable SME suppliers to gain better access to working capital and should therefore contribute to SME growth, enhancing their ability to create jobs in their home markets.
“This unique financing structure, the first of its kind, will help global retailers like the Landmark Group to utilize this approach to impact the cash flows of suppliers across emerging markets in a positive way,” said Harold Leenen, Head of Global Transaction Banking, Middle East & Africa at Deutsche Bank. “As an institution, we are proud to have jointly developed this structure with our transaction partners.”
“We would like to thank our partners ADB & Deutsche Bank for developing this Supply Chain Financing program. This will enhance our relationships with Asian SME suppliers and pave the way for other such programs. In addition, we would reap the benefits backed by the AAA rating of ADB and efficient solution delivery by Deutsche Bank.” said Rajesh Garg, Group Chief Financial Officer, Landmark Group.
Landmark Retail Ltd Group’s objective through this program is to build reliable and sustainable relationships with its suppliers in developing Asia.
Backed by its AAA credit rating, ADB’s SCFP complements its successful Trade Finance Program. The SCFP shares risk with partner banks and improves liquidity within supply chains, mostly for SMEs. This support to SMEs in developing Asia contributes to growth and job creation.