In order to further facilitate the exporters, the State Bank of Pakistan (SBP) has enhanced the limit of refinancing provided to the banks under Exports Finance Scheme (EFS) by Rs100 billion. Hence, the banks will now have overall limits of Rs700 billion for the exporters for FY21.
Moreover, to promote export-oriented investment, Rs90 billion have also been allocated under the Long Term Financing Facility (LTFF) for FY21.
According to a statement issued by the central bank, this amount is in addition to a limit of Rs100 billion already allocated to banks/DFIs under Temporary Economic Relief Facility (TERF) — a concessionary refinance scheme to set up industrial units.
EFS and LTFF are two of the oldest schemes of SBP under which concessionary financing is provided to the exporters. EFS has been operational since 1973 to meet short term financing needs of exporters, while LTFF has been available since 2008. For both the schemes, their Shariah-compliant versions are also available.
“Since the emergence of Covid-19, SBP has taken several measures to counter its impact on the economy and safeguarding the country’s exports has been a key priority,” the statement read. “It is expected that the steps taken by the SBP, which have been widely appreciated by the business community, will help address exporters’ liquidity constraints.”