FTB Boosts Trade Finance in Cambodia with ADB Partnership

The Foreign Trade Bank of Cambodia (FTB) has teamed up with the Asian Development Bank (ADB) to enhance trade finance in Cambodia, particula...

The Foreign Trade Bank of Cambodia (FTB) has teamed up with the Asian Development Bank (ADB) to enhance trade finance in Cambodia, particularly for its micro, small, and medium-sized enterprises (MSMEs). This collaboration aims to address market gaps and provide financing through partner banks to support trade and MSMEs, which comprise about 99% of all enterprises in Cambodia.

In a significant move, the ADB Country Director for Cambodia, Jyotsana Varma, and FTB’s Chief Executive Officer, Dith Sochal, inked the deal at ADB’s Cambodia Resident Mission in Phnom Penh on Feb. 6. Varma emphasized the agreement's role in promoting private sector participation and economic diversification in Cambodia, which aligns with ADB's development initiatives.

As a partner bank of the ADB's Trade and Supply Chain Finance Programme (TSCFP), FTB will extend support to corporate and MSME clients in Cambodia. This entails allowing trade finance instruments issued by FTB to be covered by TSCFP’s credit guarantees, aiming to increase the involvement of international banks in Cambodia’s market.

Trade stands as a cornerstone of Cambodia's economic development, and this collaboration is poised to unlock further opportunities for regional and international trade expansion. With ADB's substantial lending presence in Cambodia, averaging US$363.28 million annually from 2019 through 2023, this partnership signals a concerted effort to bolster economic growth.

To maximize the effectiveness of this partnership, FTB has been actively engaging with TSCFP to enhance its knowledge and skills in trade facilitation. Through initiatives focused on report preparation, best practices, innovative strategies, training modules, and performance measurement, FTB is gearing up to play a more robust role in supporting trade and MSMEs.

Backed by ADB's AAA credit rating, TSCFP has been instrumental in providing loans and guarantees to over 200 partner banks, facilitating trade, and fostering growth in emerging markets. Since its inception in 2009, TSCFP has supported over US$57 billion in trade transactions, contributing significantly to economic development.

Established in 1966 and owned by 68 members, ADB remains steadfast in its commitment to achieving a prosperous, inclusive, resilient, and sustainable Asia-Pacific region. With a focus on eradicating extreme poverty, ADB's collaboration with FTB signifies a step forward in fostering economic resilience and prosperity in Cambodia and beyond.