KARACHI: The Union of Small and Medium Enterprises (UNISAME) has advised the SME exporters to adopt the system of ESCROW transactions for exports to global destinations under which payment is held by a third party on behalf of the two transacting parties and released to the seller on delivery and inspection of goods by the buyer.
President UNISAME Zulfikar Thaver said SME exporters feel uncomfortable in exporting goods to unknown buyers and to secure themselves they are advised to transact business through ESCROW whereby as per arrangement money is delivered to a third party (ESCROW agent) to be held in trust pending the fulfilment of condition in a contract whereupon the ESCROW agent will deliver the payment to the seller.
Thaver said that buyers are not inclined to establish letter of credit in favour of sellers especially unknown sellers and in an ESCROW transaction they are assured that payment will be released to the sellers only when goods are received by them to their satisfaction and as per the order placed by them.
He said that ESCROW transactions are in vogue and practiced all over the globe and urged commercial banks to introduce ESCROW to facilitate SME exporters and secure their transactions under the system.
Copyright PPI (Pakistan Press International), 2011
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