The Asian Development Bank (ADB) has entered into a Risk Participation Agreement with Security Bank to expand supply chain finance access for small businesses (SMEs) across the Philippines.

According to a report by the Philippine News Agency, the deal marks the first agreement of this kind signed by the multilateral lender with a local bank.

Under the agreement, the multilateral lender will share and diversify credit exposure through its Trade and Supply Chain Finance Programme.

This structure enables the local bank to extend further financing to support more local suppliers.

The initiative will help businesses receive earlier payments and manage cash flow more effectively.

It also aims to strengthen overall operational stability within local and regional supply chains.

Andrew Jeffries, Country Director for the Asian Development Bank, stated that the collaboration helps address the financing gaps faced by smaller enterprises.

Jeffries added that the institutions are creating a replicable model that can be expanded in the local market to help businesses access essential liquidity.

Many local suppliers often struggle to access timely and affordable working capital even when they maintain established trade relationships with larger buyers.

The new agreement allows the local lender to extend support to more suppliers and help local businesses remain competitive.

Steven Beck, Trade and Supply Chain Division Director at the multilateral lender, and John Cary Ong, Executive Vice President at the local bank, signed the agreement in Manila.

The broader supply chain programme currently delivers guarantees and loans through more than 200 partner banks to support global trade.

Featured image: Edited by Fintech News Philippines based on an image by pressfoto via Magnific.