ADB and Standard Chartered Bank Partner to Boost Supply Chain Finance in India
The Asian Development Bank (ADB) and Standard Chartered Bank have entered into agreements aimed at strengthening supply chain finance in India through risk-sharing arrangements that cover both USD and rupee transactions. This collaboration seeks to address financing gaps for businesses, particularly small and medium-sized enterprises (SMEs), by expanding access to trade and supply chain finance.
Key Components of the Agreements
The partnerships include two main components: a risk participation arrangement structured through Gujarat International Finance Tec-City (GIFT City) to support US dollar-denominated transactions, and a partial guarantee facility agreement to facilitate onshore rupee transactions. These arrangements are designed to enhance the flow of cross-border and domestic trade by providing businesses with more robust financial tools.
Focus on SMEs and Supply Chain Resilience
The collaboration emphasizes support for emerging and underserved segments of supply chain finance, particularly distributor financing. By enabling risk participation in distributor finance transactions, the partnership aims to unlock working capital for downstream players, including SMEs, which are critical to domestic supply chains. This initiative aligns with ADB’s strategic priority of promoting inclusive economic growth and financial deepening across Asia and the Pacific.
Significance of the Partnership
The agreements extend ADB’s risk-sharing capacity into both offshore and onshore segments of the Indian market, addressing financing gaps that commercial institutions have struggled to fill. ADB Vice-President Bhargav Dasgupta and Standard Chartered Bank’s India & South Asia Chief Executive Officer P D Singh signed the agreements, highlighting the importance of public-private collaboration in fostering economic resilience.
Access to trade and supply chain finance remains a critical challenge for businesses seeking to manage working capital and participate in regional and global trade. This partnership represents a significant step toward overcoming these barriers, ensuring continued support for India’s economic activities.