KARACHI: The primary aim of export finance scheme (EFS) is to boost the country’s exports. The EFS is a policy through which exporters are being provided financing facilities. These financing facilities are provided through the banks to the exporters of manufacturing goods, especially exporters of the value-added goods.
The State Bank of Pakistan has recently increased the financing facility markup from 5.5 percent p.a. to 7.5 percent p.a. As country going through economic crisis with a deteriorating balance of payments, the Employers Federation of Pakistan strongly condemned this action by the State Bank of Pakistan.
The president of EFP, Ismail Suttar said: “This decision by the government will only cause more difficulties for the exporters.
At this time of economic turmoil, Pakistan should focus on increasing exports and the government should provide support rather than marking up rates in the export finance scheme”.
The increase in the EFS markup will discourage exporters as it will increase the costs of exporting goods. Pakistan is in dire need of foreign reserves and thus exporters need to be further incentivised.
Ismail Suttar also stated: “We have one of the highest markup rates in the South Asian region. Exports will help Pakistan’s economy recover, will lead to a better BOP and will thus help Pakistan revive itself from the current economic crisis.”
Copyright Business Recorder, 2022
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