More Pakistan banks join ADB's finance program

The participation of NIB Bank Ltd. and Soneri Bank Ltd. in the ADB's Trade Finance Program  means there are now 13 Pakistani banks signed up to the program.

The TFP provides finance and guarantees through banks to support trade transactions in developing countries. Companies and banks in emerging markets often have difficulties accessing trade finance which undermines trade and slows economic growth and job creation.

"By expanding the reach of the Trade Finance Program in the Pakistan banking sector, we will help make trade finance available where necessary to an even wider array of firms, including small and medium-sized enterprises," said Robert van Zwieten, Director in ADB's Private Sector Operations Department that oversees the TFP.

Smaller firms typically have more trouble than larger, well-known companies in accessing trade finance from banks because they have a limited credit history or because banks prefer to lend to known customers.

"Further expanding TFP coverage in Pakistan will be a way to keep the country firmly on the road to sustainable economic recovery," said ADB's Pakistan Resident Mission Country Director Rune Stroem.

The TFP has provided an array of support for trade in Pakistan. In addition to general trade finance, the program offers guarantees to support imports of oil into Pakistan, which relies heavily on oil from overseas to keep its industry and homes running. In the immediate aftermath of extensive floods in mid 2010, ADB implemented a special $500 million Flood Relief Facility for Pakistan to help companies import basic commodities such as food and medicine and capital equipment for agriculture and infrastructure reconstruction.