Major Breakthrough for Pakistan’s Export Sector: New Insurance Scheme Launched for SMEs to Secure Overseas Payments
ISLAMABAD: The Export-Import Bank of Pakistan (Pak Exim) and the Export Development Fund (EDF) today unveiled a new and dedicated insurance scheme for small and medium enterprises (SMEs) to further support export initiatives of Pakistan’s small firms.
This new scheme will provide formal protection for the first time for SME exporters from the risk posed by non-payment from foreign buyers. The scheme will protect local businesses from financial losses in case international clients do not pay due.
The coverage will enable smaller businesses to accept larger global orders with greater confidence, which will help smooth the path for smaller businesses to enter new global markets and mitigate the typical credit risks of cross border business, officials said.
To make businessmen’s life easy Pak Exim has opened offices at Sialkot and Faisalabad to provide entrepreneurs with detailed information on insurance policies and claim procedure. To support the initiative, Pak Exim and the Export Development Fund are setting up a strong risk pool valued at nearly Rs3 billion ($10 million).
Further, the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), a member of the Islamic Development Bank Group, will provide an important reinsurance support to the scheme on a global basis.Economists predict that the scheme will boost the output of small and medium-scale enterprises, create new jobs and open the door to more foreign exchange.