Manila - The Asian Development Bank (ADB) said Wednesday it has expanded its trade finance facilitation programme to 1 billion dollars to help ease a "dramatic reduction" in funding caused by the global financial crisis.

The Manila-based ADB said the programme's expansion could generate up to 15 billion dollars in much-needed trade support by the end of 2013.

"One dollar of exposure can attract a similar amount of private sector financing," noted Steven Beck, an investment specialist managing the programme. "This, plus the fact that the portfolio can roll over twice a year, means that the 1 billion dollar programme can equal as much as 3 billion dollars in support for trade every year."

The bank noted that the worldwide financial downturn "has caused a dramatic reduction in the availability of the financing that companies rely on to trade, exacerbating an already dire global economic situation."

The shortage of trade financing has hit developind countries as many major international banks focus on rebuilding their capital and reducing risk, the ADB said.

The ADB programme, which started in 2004 with 150 million dollars, provides finance and guarantees through, and in conjunction with, international and local banks to support trade transactions in developing nations.

By the end of 2008, the programme has supported nearly 1,200 international trade transactions worth more than 578 million dollars, the ADB said. It has been used in nine countries in Asia, without incurring any losses or problem loans.

"Access to trade finance in times of crisis is vital to cushioning the shock of the global downturn on international trade," said Philip Erquiaga, director general of the ADB's Private Sector Operations Department.

"If the world is to emerge from the current economic malaise, it will require focus on international trade which can help fuel virtually the only growth in evidence, which is in developing countries," he added. (dpa)