According to a recent assessment by the Independent Evaluation Department (IED) of the Asian Development Bank (ADB), the Trade and Supply Chain Finance Program of the ADB has been essential in filling trade finance shortages in developing Asia and the Pacific, especially in times of crisis.
In a constantly changing global trade environment, the research suggests strategic improvements to guarantee the program’s continued delivery of inclusive and sustainable development benefits.
The assessment, which spans the years 2014–2024, is conducted in the midst of increased protectionism, geopolitical tensions, and uncertainties surrounding international commerce.
It underscores the need for ADB to recalibrate its approach to trade and supply chain finance to better support inclusive, sustainable, and regionally integrated growth, said an ADB press release.
“Trade remains a powerful engine for development, but the rules of the game are changing,” said IED Director General Emmanuel Jimenez. “As global trade evolves, we must ensure ADB programs not only facilitate trade flows but also reach smaller banks and underserved markets,” he added.
The evaluation finds that ADB’s Trade Finance Program delivered strong results during crises such as the COVID-19 pandemic and Sri Lanka’s economic emergency, though its operations remain heavily concentrated in a few countries.
The Supply Chain Finance Program, meanwhile, has struggled to scale, with limited engagement from domestic financial institutions and a focus on low-risk transactions.
“While the Supply Chain Finance Program has made progress, its potential remains largely untapped.
To deliver greater development impact, ADB must revisit its strategy, broadening the scope beyond post-shipment finance, integrating domestic banks, and building institutional capacity to support supplier financing in lower-income markets,” said evaluation team leader Paolo Obias.
To remain relevant and impactful, the evaluation calls for a more deliberate strategy to expand ADB’s trade finance reach into underserved markets and to strengthen support for small and medium-sized enterprises (SMEs).
Additionally, it suggests updating the program’s operational systems, which are now based on manual procedures, in order to increase productivity and lower risk in this high-volume industry.
It also urges improved monitoring of development results, particularly in knowledge and assistance programs for SMEs, including digital commerce, anti-money laundering, and sustainable supply chain finance.
The assessment provides current insights for ADB and its partners to guarantee that trade finance continues to be a stimulus for equitable development as global commerce grows more complicated and fragmented.
Concerning ADB’s Independent Evaluation.
ADB’s Independent Evaluation, reporting to the Board of Directors through the Development Effectiveness Committee, provides objective assessments of ADB’s strategies, operations, and results to help improve development outcomes across Asia and the Pacific.
*
Email *
Website
