Kathmandu, Nepal (BBN)- The Asian Development Bank (ADB) signed trade financing agreements with eight banks in Nepal on Tuesday to facilitate foreign trade in the South Asian country.
The ADB signed the agreements in Kathmandu with Bank of Kathmandu Ltd., Everest Bank Ltd., Himalayan Bank Ltd., Kumari Bank Ltd., Nabil Bank Ltd., Nepal SBI Bank Ltd., Nepal Industrial & Commercial Bank Ltd., and Nepal Investment Bank Ltd.
The agreements are aimed at promoting international trade in the landlocked South Asian nation and helping Nepali banks forge alliances with banks oversea.
The agreements are part of ADB's Trade Finance Facilitation Program (TFFP). The program, expanded to US$1 billion in March, provides guarantees and loans of up to three years to support trade transactions in its developing member countries.
Exporters and importers in the less-developed parts of Asia have struggled for some time to obtain trade finance because of broad risk aversion but this became even more difficult following the onset of the global economic crisis as large international banks refrained from offering such financing in favor of building up their capital base, the ADB said.
Trade is widely acknowledged as a key tool for economic growth and poverty reduction but the TFFP also helps support the banking sector in ADB's developing member countries.
BBN/SS/SI/AD-12August09-2:10 am (BST)