ISLAMABAD: The Asian Development Bank on Thursday entered into trade financing agreements with four more Pakistani commercial banks under its Trade Finance Facilitation Programme (TFFP), bringing the total number of Pakistani banks to nine.

The agreements with Bank Al-Falah, Faysal Bank, Habib Metropolitan Bank and United Bank, would help direct much needed finance to exporters and importers in the South Asian nation. 

In May, the ADB signed its first TFFP agreements in Pakistan with Allied Bank Limited, Bank AL Habib Limited, Habib Bank Limited, Meezan Bank Limited, and National Bank of Pakistan.

The Trade Finance Facilitation Programme is the first region-wide programme undertaken by the ADB aimed at helping banks in developing member countries to provide trade finance products to importers and exporters. 

The TFFP helps Asian countries maintain, re-establish and enhance trade finance lines.

The TFFP provides guarantees to confirming banks and revolving credits to issuing banks located in developing member countries; enhances banks’ abilities to offer importers and exporters access to financial services; works in partnership with the private sector to provide capacity, liquidity and stability to the trade finance system. 

'Trade is an essential tool in boosting economic growth, creating jobs and attracting private capital, thereby reducing poverty levels,' said Philip Erquiaga, Director-General of ADB’s Private Sector Operations Department.

The one billion dollars TFFP provides finance and guarantees through, and in conjunction with, international and developing member country banks to support trade transactions in developing countries. This is critical since borrowers in emerging markets have typically experienced difficulties in accessing credit.

That threatens to undermine trading activities in Asia, a region that is recovering more quickly than others from the global financial crisis.

By attracting private sector financing, and because the portfolio can roll over once a year, the TFFP could generate $15 billion in trade finance through 2013. 

'ADB expects Pakistan’s economy to grow by 2 per cent this year, a slowdown from growth of 4.1 per cent last year and 6.8 per cent in 2007.  ADB is committed to helping Pakistan weather the worldwide crisis and laying the foundations for long-term growth by providing support to its numerous importers and exporters,' said Rune Stroem, Country Director of ADB’s Pakistan Resident Mission. 

The Asian Development Outlook 2009 Update of ADB, published in late September, also forecast Pakistan’s economy to grow 3.0 per cent in 2010. It forecast Pakistan to have a current account deficit of 5.3 per cent of gross domestic product this year and 4.8 per cent in 2010.