ADB Partners with Security Bank, Philippine SMEs Helped to Get More Capital Faster

JAKARTA - The Asian Development Bank or ADB has partnered with Security Bank Corporation to expand supply chain financing for small and medium-sized businesses in the Philippines. This agreement is ADB's first cooperation with a Philippine bank through a Risk Participation Agreement or RPA scheme.

Quoted from the Philippine News Agency (PNA), Tuesday, May 12, ADB will share credit risk with Security Bank through the Trade and Supply Chain Finance Program or TSCFP. With this scheme, Security Bank can channel financing to more local SME suppliers.

This model is important because many SMEs actually have trade relations with large companies, but still have difficulty getting quick and affordable working capital. As a result, cash flow often stagnates while waiting for payment.

Through this cooperation, business actors are expected to receive payments earlier, manage cash flow better, and maintain business activities stable in local and regional supply chains.

"This partnership shows how ADB's collaboration with local financial institutions helps address the financing gap faced by SMEs and build a more resilient supply chain," said ADB Director for the Philippines Andrew Jeffries quoted by PNA.

He said the cooperation with Security Bank could be a model that could be expanded in the local market.

"Together with Security Bank, we are creating a model that can be replicated and expanded in the local market, helping SMEs across the country access the liquidity they need to grow and create jobs," he said.

The agreement was signed at ADB's headquarters in Manila. The signing was carried out by ADB's Trade and Supply Chain Division Director Steven Beck and Executive Vice President and Head of Wholesale Banking Security Bank John Cary Ong.

With an AAA credit rating, ADB through TSCFP provides guarantees and loans through more than 200 partner banks. This program supports trade and opens up import and export opportunities for businesses.

Since 2009, TSCFP has supported trade worth more than 74 billion US dollars. The focus is on sectors that drive sustainable growth and regional integration.