The Asian Development Bank (ADB) called on multilateral development banks to accelerate trade finance support of the small and medium enterprises (SME) in Asia, at an SME summit held on Wednesday as part of the series of the Asian-Pacific Economic Cooperation (APEC) meetings in Singapore this week.

The shortage of trade financing caused by the worldwide financial downturn has hit developing economies in Asia particularly hard as many major international banks focus on rebuilding their capital and reducing risk, according to Robert van Zwieten, Director of ADB's Capital Markets and Financial Sectors Division, at a plenary session of the APEC SME Summit.

He called on the multilateral development banks, including the ADB, to accelerate support of "SME and SME finance" in Asia.

Since many Asian countries are export-led, the financial crisis has made great impact on emerging Asia through decline in exports. Many Western banks deleveraged and reduced their credit to Asia which resulted in the subsequent drying up of dollar liquidity, interbank markets and trade finance.

The drying up of trade financing in Asia threatens to undermine trade activities in the region and hold back the overall economic recovery and growth, Zwieten said.

The ADB has started the Trade Finance Facilitation Program since 2004 as the first region-wide program aimed to help banks in developing member economies provide trade finance products to importers and exporters.

The APEC Leaders Week, running from Nov. 8-15, will see economic leaders and ministers from 21 members of the APEC discuss issues related to post-crisis economic recovery and regional economic integration.