Pakistan launches EXIM Bank to boost exports and investment

Pakistan has launched the Export-Import Bank of Pakistan (EXIM) to support the government’s vision to improve exports and investment in the country, Caretaker Finance Minister Dr. Shamshad Akhtar said on December 21, during the launch ceremony of EXIM bank.

The operationalization of Exim Bank “is a proud moment and a major milestone” for Pakistan as it would support the banking and trade finance sectors, she said.

With the launch of EXIM Bank, the export finance schemes (EFSs) would be transferred to the new institution, said Dr Shamshad adding that such schemes would be gradually moved out from the State Bank of Pakistan (SBP) due to legal compulsions.

The minister said the gradual transfer of EFSs from the SBP was part of the IMF-backed reforms program. The operations and management of these schemes will also be separated from the SBP and transferred to the Exim Bank. The central bank would only monitor the scheme and perform regulatory functions, such as eligibility and disbursement mechanisms.

Objectives of EXIM Bank

The prime objective of EXIM Bank is to safeguard the balance sheets of exporters and set up the way for a level playing field through national ECAs or EXIM support. It will:

  • Offer lending, credit insurance, and guarantee services
  • Enhance global competitiveness of Pakistani exports
  • Provide protection against lending and credit default risks of foreign receivables
  • Level the playing field against competitors with national ECAs and Exims
  • Facilitate access to wider global markets
  • Similar institutions disbursed $2.5 trillion in trade finance last year

Trade credit insurance program

The trade credit insurance programs offered by Exim Bank enable exporters and their banks to extend open terms to international buyers, a departure from the traditional reliance on letters of credit or prepayment for secure transactions.

These schemes provide insurance coverage to exporters and their banks, safeguarding them against non-payment of receivables due to various covered reasons in international transactions. Under the EBP, losses incurred are covered up to the assured values outlined in each policy.

EXIM bank to help enhance exports, says PCMEA

Pakistan Carpet Manufacturers and Exporters Association (PCMEA) welcomed the government’s initiative to set up the first Export-Import Bank and hoped the bank would help increase exports and get access to new international markets.

PCMEA officials, including Senior Vice Chairman Usman Ashraf, Carpet Training Institute (CTI) Chairperson Ijazur Rehman, and others said in a joint media statement on Sunday that the availability of credit insurance and guarantee services would solve a major problem faced by exporters.

“First of all, we have to compete with our regional competitors for which the patronage of the government is indispensable as the governments of the regional countries are giving concessions and relief to their exporters in various terms that is why they have consistent growth in their exports,” said Usman Ashraf.

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