Print Edition - 2015-05-20 | MONEY
ADB to boost trade finance by $40 million
May 19, 2015-
The Asian Development Bank (ADB) has said that it is expanding its Trade Finance Programme (TFP) in Nepal by an additional $40 million to help finance imports of much needed goods to support reconstruction and immediate needs in response to the recent earthquake.
The TFP provides guarantees and loans through banks to support trade. Particularly, support goes to small and medium scale enterprises and the ADB has more than 200 partner banks across Asia.
“The emergency facility for Nepal will help remove financial constraints when companies approach their banks to import what they need for emergency assistance, rehabilitation and reconstruction,” said Steven Beck, the ADB’s head of Trade Finance in a press release. “Since trade finance is typically short-term and can roll over in less than 180 days, the impact of this facility can reach $80 million within a year.”
Support for trade finance will add to the $3 million grant from the Asia-Pacific Disaster Response Fund that the ADB is providing for relief efforts and the up to $200 million additional resources for projects in the first phase of rehabilitation.
The emergency TFP facility for Nepal will be implemented through four Nepali banks—Himalayan Bank, Nabil Bank, Nepal Investment Bank and NIC Asia Bank—already participants in the ADB’s TFP. The facility will prioritize imports of basic commodities—including food and medicine—and needs related to reconstruction.
The recent earthquakes, besides killing and injuring thousands of people, caused the collapse of thousands of buildings and transport systems including roads, rendering them unusable. Over two-thirds of Nepal’s 75 districts are thought to have been affected by the earthquake. “It will impose a huge economic toll on the country,” said the ADB.
Its preliminary estimates are that Nepal’s economic growth may decline to 4.2 percent for the fiscal year 2014-15, compared to the March projection of 4.6 percent.
After the quakes, the Asian lender has established a Nepal Earthquake Response Team, which along with UN agencies and other development partners, will assess the damage and long-term investment needs for reconstruction and rehabilitation.
Published: 20-05-2015 08:02