SBP exercises its grey cells over export boost | Pakistan Today

SBP exercises its grey cells over export boost

The State Bank of Pakistan (SBP) has decided to introduce the Export Finance Facility for Locally Manufactured Machinery (EFF-LMM) with a view to promoting export of the sector.
This new financing Facility will be effective from January Thursday (Jan 3) and remain valid till further instructions, a statement of the Central bank said.
The exporters can avail long term financing facilities through banks for export of eligible Plant & Machinery and Engineering Goods under the Facility. Financing facilities shall be available both at pre-shipment and post-shipment stages for a maximum period of five years.
Highlighting the salient features of the new financing Facility are as under, the SBP said that the Financing for 5 years (including 1 year grace period) will be available for export of Plant & Machinery of the value of US$10 million or more.
Further, Specified Plant & Machinery of the value less than US$10 million will be eligible for 3 years (including six months grace period) financing. Other machinery items will be eligible for financing up-to 01 year.
The financing shall be available through banks, which are approved as Participating Financial Institutions (PFIs) under the Long Term Financing Facility (LTFF).
Requests of new banks shall be processed as per SBP’s criteria and financing shall be available against Letter of Credit (LC).
However, financing will also be available against export contract for tenor upto one year.
The SBP added that refinancing shall be available to the extent of total value of Letter of Credit/Contract less advance payment, or 80% of the value of Letter of Credit/Contract, whichever is lower.
The Finance to the exporters will be available at the rates applicable under the Long Term Financing Facility (LTFF) viz. 10.30% p.a. and 10.90% p.a. for 3 & 5 years respectively.
However, as compared to LTFF, banks’ spread under this Facility is being increased by 0.5% for 3 years financing to encourage the banks to extend financing to the non-traditional exporters i.e. Engineering Goods.
The repayment of principal amount of loan shall be made in equal half yearly or quarterly installments after grace period, if any. Mark up shall be paid on quarterly basis, SBP added.
The SBP further said that this new financing Facility will supersede the instructions concerning Part-B -Export Sales of LMM Scheme as contained in ICD Circular No. 1 dated April 27, 1987 read with subsequent amendments made from time to time, says IH&SMEFD Circular No. 4 of January 03, 2013.
SBP allows Advans Pakistan Microfinance Bank to commence business

The State Bank of Pakistan (SBP) has allowed commencement of business to Advans Pakistan Microfinance Bank Limited from tomorrow (January 4, 2013).
The Advans Pakistan Microfinance Bank Limited has been licensed to operate in the Province of Sindh. Initially, the bank is starting its operations with one branch at Karachi.
With the commencement of business by Advans Pakistan Microfinance, the number of Microfinance Bank operating in the country will rise to ten which include Khushhali Bank Ltd., The First Microfinance Bank Ltd., Tameer Microfinance Bank Ltd., Pak Oman Microfinance Bank Ltd., NRSP Microfinance Bank Limited, KASHF Microfinance Bank Ltd., APNA Microfinance Bank Ltd., Waseela Microfinance Bank Limited and Rozgar Microfinance Bank Ltd.
The commencement of business of Advans Pakistan Microfinance Bank Limited will result in a significant increase in the market share of regulated microfinance banks within the overall microfinance sector. This will also lead to the increased provision of inclusive financial services in the rural and remote areas of the country.

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