The TFFP fund is meant for boosting liquidity and stability of the trade-finance systems in the region.

Under the TFFP, the ADB will provide political and commercial risk guarantees to international banks bold enough to open credit lines to the region's poorest and riskiest countries, also including Afghanistan, Bhutan, Cambodia, Laos, Mongolia, Nepal, the Philippines, Sri Lanka and Vietnam.

Bank officials said the aim of the guarantees is to encourage global banks to fund imports by countries seen as vulnerable to crises or not normally known as profitable markets.

It is also part of ADB's goal to reduce poverty in Asia, home of two-thirds of the world's poor, despite its robust economic growth in present times.

According to reports reaching here yesterday, more than 40 international banks, including top lenders from the United States, Japan and Europe, have committed to participating in the programme. They were designated as "founding partner banks" at the TFFP launch.

By the end of the year, some 30 local banks in priority emerging markets should be accredited under the TFFP as issuing banks, making them eligible for ADB guarantee support and direct loans.

Under the trade-finance recipe, ADB's overall exposure limit will be $150 million, which will offer three facilities:

A revolving partial credit guarantee (PCG) facility, under which ADB will guarantee to confirming banks the payment of letters of credit and other documentary credits issued by accredited local banks in the Asian region, excluding the Central Asian Republics (CARs).

A revolving PCG facility, in the form of a risk-sharing arrangement with European Bank for Reconstruction and Development (EBRD), which will guarantee letters of credit issued by accredited local banks in the CARs.

A revolving loan facility, under which ADB will offer short-term loans to the banks accredited for participation in the PCG facilities, to help fund the hard currency-borrowing requirements of their private- sector exporter and importer clients.

The facility also complements the donor agency's public-sector loans to banking sectors around the region. The programme is part of a broader strategy to use financial intermediation to promote private-sector development, and, through this, economic growth, according to Pamela Bracey, the TFFP Mission Leader.