KARACHI: The Export Finance Scheme’s (EFS) main goal is to increase exports. The EFS is a policy that helps exporters get money.
Exporters of manufactured goods, especially those of goods with added value, can get these types of loans from banks.
The State Bank of Pakistan has raised the markup on credit facilities from 5.5 percent to 7.5 percent per year. The State Bank of Pakistan’s move has been harshly criticized by the Employers Federation of Pakistan. This comes as the country is in the middle of an economic crisis and its balance of payments is getting worse.
Ismail Suttar, the head of EFP, said, “This decision by the government will only make things harder for exporters.” During this time of economic trouble, Pakistan should focus on increasing exports, and the government should help instead of raising rates in the export finance scheme.
The increase in the EFS markup will put off exporters because it will make it more expensive to ship goods abroad. Pakistan needs foreign reserves badly, so exporters need to be given more reasons to sell their goods.
Ismail Suttar also said, “We have one of the highest markup rates in South Asia.” Exports will help Pakistan’s economy get better, which will improve the BOP and help Pakistan get out of its current economic crisis.