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SBP Export Finance Scheme
Refinance Scheme Unit.
SBP Banking Services Corporation
Faisalabad.
Prepared By,
Muhammad Maqsood Sr. Officer
Introduction & Transitional Overview
• The scheme was launched in March 1973 known as “Refinance Scheme
for Non Traditional and Newly Emerging Exports” with a view to provide
adequate bank credit for exports of non traditional and newly emerging
commodities on attractive terms.
• This was 90 days (Pre-shipment) facility with a 90 days Rollover Option.
• May 1976 the scheme was renewed as “Refinance Scheme for Exports”
to include all exports of manufactured goods other than raw cotton, rice
wool and hides and skins for concessionary finance.
• October, 1977 the scope of scheme was further enhanced to introduce a
new feature of performance based finance under Part-II of the scheme
that was re-named as “Export Finance Scheme (EFS)”.
Introduction & Transitional Overview
• 1998, Refinance facility was also extended to Indirect Exporters
subject to fulfillment of requirements.
• The Export Finance Scheme has gone into major modifications in
the years 1985, 1998, and 2001.
• 2001, as a part of liberalization of banking sector and to address
the issue of excessive documentation, processing of Part-I cases
was entrusted to banks.
• July 2007, financing/ refinancing was introduced on a ratio as:
Bank : SBP
30:70
• November 2008, 100% refinancing by SBP.
• February 2009, extension of 90 days was provided under Part-I.
subject to showing performance 117% of borrowed amount.
SBP Export Refinance Scheme
Legal Framework
• SBP ACT-1956 Section 17(2a) and 17(4c) authorize SBP to carry
on and transact the several kinds of business including
purchase, sale & rediscount of bills of exchange and promissory
notes maturing within 180 days as well as advances or loans to
commercial banks.
• The extension of advances to commercial banks under the
scheme is made out of the “Export Credit Fund” established
under section 17C(2a) of SBP ACT 1956.
• Section 17(6B) also authorizes SBP to provide refinance to
commercial banks and financial institutions for agricultural or
industrial purposes on other such terms and conditions as the
Central Board of SBP may decide from time to time.
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Objectives of EFS
Scope & Objective of EFS
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Short term Financing Facility to Exporters
Uplift of exports of Pakistan
Concessionary finance to encourage/motivate exporters
Diversification of Exports
Value added & finished products
Manufactured goods
Expansion & spreading out new markets
Growth of economy- Rise in GDP
Inflow of FOREX-International trade
Development Finance Support Department
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Negative List
Rationale of Negative List
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Raw Cotton
Crude Vegetable Materials
Hides & Skins
All metals/ ores
Jewelry exported under
entrustment Scheme
Works of Arts & Antique
Wood in rough & squared
Wool & Animal hair
Stone, sand & gravels
Petroleum Products
All Grains including Grain Floor
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Cotton Yarn all types
Crude Animal Materials
Leather wet blue
Fertilizer Crude
Mutton and Beef other than
frozen & preserved
Fur Skins
Bleach & Un-bleach cloth
Live Animals
Waste & Scrape of all kinds
Crude vegetable materials
Crude Minerals
Development Finance Support Department
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Salient Features of EFS
Categorization of EFS:
A. EFS- Part-I
Transactions Oriented
B. EFS Part-II
Performance Oriented
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Operational Mechanism
Operational Mechanism
EFS- Part-I ( Transactions oriented)
1. Pre-Shipment
2. Post Shipment
Development Finance Support Department
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Operational Mechanism
Pre-shipment – Process
Pre-Shipment:
 Exporter having received the Firm Export Order / Letter of
Credit approaches the commercial bank.
 Commercial bank, if satisfied with the documents,
provides pre-shipment finance to the exporter to
manufacture the order.
 Bank then approaches SBP BSC for the Refinance.
Development Finance Support Department
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Operational Mechanism
Pre-shipment
Pre-Shipment:
Exporter after availing the finance has to:
1. Make the shipment within 180 days of obtaining
the finance.
2. Get the export proceeds realized within 210 days of
date of shipment
Development Finance Support Department
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Operational Mechanism
Post-Shipment - Process
Post Shipment:
 Exporter having shipped the goods approaches
commercial bank for short term finance against its
shipment to bridge the gap between his immediate
financial needs and export proceeds realization.
 Commercial bank, if satisfied with the documents,
provides Post-shipment finance to the exporter against the
shipment already made.
 Bank then approaches SBP BSC for the Refinance.
Development Finance Support Department
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Operational Mechanism
Post-shipment:
 Exporter has already shipped the goods
 Exporter has to get the proceeds realized within 210
days of date of shipment
Development Finance Support Department
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Operational Mechanism
Processing at SBPBSC:
 Step I:- Bank will disburse financing to the eligible
exporter against in order requisite documents. Bank will
approach the concerned SBP BSC Office to obtain
refinance.
 Step II:- The bank will submit Form D and DP Note
(executed by the exporter concerned) to SBP BSC
(Bank) to claim refinance.
 Step III:- If documents are in order, SBP BSC will
provide refinance within 48 hours.
Development Finance Support Department
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Operational Mechanism
Repayment of Finance:
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
On Maturity of Loan.
Earlier, if export proceeds are realized before the expiry
of the tenor of the loan.
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Banks have to repay refinance within 3 working days of
the negotiation / realization of export proceeds, failing
which punitive action will be taken as per rules.
If on maturity of the loan, borrower does not pay to the
bank, bank will settle SBP BSC Bank refinance loan on
due date in any case.
Development Finance Support Department
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Operational Mechanism
EFS Part-II:
Performance oriented
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Operational Mechanism
Limit Allocation:
 A revolving finance limit equivalent to 50% of export
proceeds realized during the previous year is fixed on
annual basis.
 Maximum period of loan is 180 days
 Export performance is matched annually against total loan
availed during the year on daily product basis
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Operational Mechanism
Procedure of Entitlement:
 The bank shall allow a limit to the exporter on the above
basis and send all copies of Form EE‐1 in respect of each
case to Foreign Exchange Operations Department (FEOD)
of the respective office of SBP BSC for verification of
realization of proceeds.
 After verifying EE-1 , the concerned FEOD shall return the
original and duplicate copies to the concerned bank and
retain the third.
 Exporter may obtain finance limit from more than one bank
to the extent of 50% of exports realized through each
bank.
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Operational Mechanism
Monitoring of Export Performance:
 Performance of the exporter shall be watched by the bank
concerned by obtaining Form EF‐1 from concerned
exporter.
 Form EF‐1 is submitted in triplicate to FEOD for
verification after close of financial year.
 After verification of these Forms by FEOD, the original and
duplicate copies shall be returned to the bank concerned,
the third copy retained by FEOD.
 The duplicate copy shall be submitted by the bank to the
respective office of SBP BSC by 31st August.
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Fines under Part-I of EFS
Nature of Irregularity
Rate of Fine
Non Shipment.
Paisa 37 per day per Rs.1000/-
Short/ Delayed Shipment.
Paisa 28 per day per Rs.1000/-
Late adjustment of funds
Paisa 42 per day per Rs.1000/-
Delayed submission of shipping documents
by the exporters.
Rs.2000/- for default and Rs.100/- for each day of
default.
Fine for wrong/ incorrect reporting/ entry
Rs.100/- per such wrong/ incorrect reported entry.
Fine for non submission of EPRC .
Rs.20,000/-, 25% of which i.e., Rs.5000/- would be non
refundable even on late submission of EPRC.
Fine for irregular availment of pre-shipment
/post-shipment export finance facility by the
exporter.
In all pre-shipment/post-shipment loans cases where it
has been noticed that shipment(s) was made
before/after (in case of post-shipment) disbursement
of finance , the shipment has to be treated as in order
subject to recovery of fine @ Rs.2000/- and Rs.100/per day for the period for which the refinance loan
remains outstanding on the part of bank or up to the
date of factual position conveyed to concerned SBP
BSC Office, whichever is earlier.
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LTFF
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Introduction & Transitional Overview
Long Term Financing Facility (LTFF) For Plant Machinery
• The scheme was launched in December, 2007 for long term
financing facility to promote export led industrial grow the
country. The facility will provide necessary finance to exporters
for adoption of new technologies and modernizing plant and
machinery in line with the international competitive environment.
Salient Features of LTFF
A. Scope: Exporters (including SMEs) can avail financing
under the facility through participating financing
institutions (PFIs) for new imported and locally
manufactured plant and machinery. The Facility will be
available to the export oriented projects with at least 50%
of their sales constituting exports or if their annual
exports are equivalent to US$ 5 million, which ever is
lower. Financing shall be available to the extent of the
C&F value of the imported new plant and machinery and
ex-factory/showroom
price of the new locally
manufactured machinery.
B. Eligible Financial Institutions: The commercial banks
including Islamic Banks and DFIs approved as PFIs will
provide LTFF.
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Salient Features of LTFF
C. Period of Financing: The loans availed under the facility
shall be repayable within a maximum period of 10 years
including a maximum grace period of 2 years from
availment date. However, where financing facilities have
been provided for period of upto 5 years maximum grace
period shall not exceed one year. The repayment of
financing (principal amount of loan) shall be made by the
borrowers in equal half yearly / quarterly installments
depending upon the tenure for which the facility is
availed. MarkUp / service charges shall be made quarterly.
Salient Features of LTFF
D. Provision of refinance: (i) SBP shall allocate an overall
yearly limit under the facility which shall be sanctioned to
individual PFIs on first come first serve basis in line with
the international criteria developed by the State Bank.
(ii) Refinance under the limit shall be provided to the PFIs
on service charge basis which shall be announced on
yearly basis effective from 1st July each year.
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Salient Features of LTFF
E. Disbursement of Refinance: : SBP BSC shall provide
refinance within two working days from the date of
receipt of request on submission of duly filled in prescribe
documents.
F. Fines for Default: (i) In case of violation of the terms &
conditions laid down in the facility the State Bank shall
reserve right to recover the amount of refinance granted
alongwith fine at the rate of paisa 60 per day per Rs
1,000/-. (ii) Late adjustment fine paisa 60 per day per Rs
1,000/-.
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Sectors eligible for financing under the Facility (LTFF)
Core Categories:
1. Textile Garments i.e. Fabrics, Garments, Made up, Towels
and Art silk & synthetic textiles.
2. Rice Processing
3. Leather & leather products
4. Sports goods
5. Carpets & Wools
6. Surgical Instruments
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Sectors eligible for financing under the Facility (LTFF)
Developmental Categories:
1. Fishiries
2. Poultry & Meat
3. Fruits/Vegetable & processing, cereal.
4. I.T. –Software & Services.
5. Marble & Granite
6. Gems & jewlllery
7. Engineering goods.
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Sectors eligible for financing under the Facility (LTFF)
Subsequently eligible Categories:
1. Import of generators / captive power plants.
2. Ethanol
3. Imported second hand machinery not more than three
years old will qualify in March, 2009.
4. Glass sector
5. Dairy sector
6. Preservations of food items.
7. Service Sector (LTFF-SS) i-Transportation ii- Computer &
information Technology.
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Salient Features of LTFF
Rate of service charges / mark up
Tenor
Rate of
Refinance
Bank’s Spred
End User’s
Rate
Up to 3 years
6.00 %
1.50 %
7.50 %
Over 3 years
and up to 5
years
5.00 %
2.50 %
7.50 %
Over 5 years
and up to 10
years
4.50 %
3.00 %
7.50 %
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FFSAP
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Introduction & Transitional Overview
Financing Facility for Storage of Agricultureal Produce (FFSAP)
• The scheme was launched in June, 2010 in order to develop the
agricultural produce marketing and enhance storage capacity.
SBP has decided to float a Scheme (FFSAP) to encourage Private
Sector to establish Silos, Warehouses and Cold Storages.
Salient Features of FFSAP
A. Scope: i- Financing shall be available on long term basis
for
establishment,
expansion
and
balancing,
modernization
&
replacement
(BMR)
of
steal/metal/concrete Silos, Warehouses & Cold Storage
facilities for storing agricultural produce.
ii- Financing shall be available for:a- Purchase of new imported & locally manufactured
plant & machinery, equipment and accessories thereof, to
be used in steal/metal/concrete Silos, Warehouses & Cold
Storages.
b- Purchase of new generators.
c- Upto 65% cost of entire civil works.
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Salient Features of FFSAP
B. Tenor and size of Loans:
i Financing shall be available for a maximum period of
seven years including a maximum grace period of six
months.
ii In case financing is provided on staggered basis,
maximum period of financing shall start from the date of
disbursement of 1st installment.
iii Maximum financing of banks/ DFIs to a single project
shall not exceed Rs. 500 million.
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Salient Features of FFSAP
C. The repayment of financing (principal amount of loan)
shall be made by the borrowers in equal half yearly /
quarterly installments depending upon the tenure for
which the facility is availed. MarkUp / service charges
shall be made quarterly.
D. Fines for Default: (i) In case of violation of the terms &
conditions laid down in the facility the State Bank shall
reserve right to recover the amount of refinance granted
alongwith fine at the rate of paisa 60 per day per Rs
1,000/-. (ii) Late adjustment fine paisa 60 per day per Rs
1,000/-.
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Salient Features of FFSAP
Rate of service charges / mark up
Tenor
Rate of
Refinance
Bank’s Spred
End User’s
Rate
Up to 3 years
5.00 %
2.50 %
7.50 %
Over 3 years
and up to 5
years
4.75 %
2.75 %
7.50 %
Over 5 years
and up to 7
years
4.00 %
3.50 %
7.50 %
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• Scheme for Financing Power Plants
Using Renewable Energy
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Introduction & Transitional Overview
Scheme for Financing Power Plants Using Renewable
Energy
• The scheme was launched in December, 2009 in order to meet
the growing electricity demand and to promote renewable
energy projects in the country.
Salient Features of Scheme
A. Eligibility Criteria: Scope: i- Financing shall be available to
the prospective sponsors desirous of setting up of Power
Projects with a capacity of up to 20 MW, who have
completed prescribed requirements of Alternative Energy
Development Board (AEDP).
ii- Financing shall be available only for establishing new
power plants of up to 20MW installed capacity using
alternative / renewable energy sources (wind, hydel,
biogas, biofuels, bagasse cogeneration, solar power and
geothermal as fuel)
iii- For purchase of new imported and locally
manufactured plant, machinery and equipment.
iv- Against LCs established from the date of issuance of
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this circular and up to June 30, 2016.
Salient Features of Scheme
B. Tenor and size of Loans:
i Financing shall be available for a maximum period of ten
years including a maximum grace period of 2 years.
ii In case financing is provided on staggered basis,
maximum period of financing shall start from the date of
disbursement of 1st installment.
iii Maximum financing of banks/ DFIs to a single project
shall not exceed Rs. 3 billion.
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Salient Features of Scheme
C. The repayment of financing (principal amount of loan)
shall be made by the borrowers in equal half yearly /
quarterly installments depending upon the tenure for
which the facility is availed. MarkUp / service charges
shall be made quarterly.
D. Fines for Default: (i) In case of violation of the terms &
conditions laid down in the facility the State Bank shall
reserve right to recover the amount of refinance granted
alongwith fine at the rate of paisa 60 per day per Rs
1,000/-. (ii) Late adjustment fine paisa 60 per day per Rs
1,000/-.
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Salient Features of Scheme
Rate of service charges / mark up
Tenor
Rate of
Refinance
Bank’s Spred
End User’s
Rate
Up to 5 years
5.00 %
2.50 %
7.50 %
Over 5 years
and up to 10
years
4.50 %
3.00 %
7.50 %
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• Refinance Facility for Modernization of Small
and Medium Enterprises (SMEs)
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Introduction & Transitional Overview
Refinance Facility for Modernization of Small and Medium
Enterprises (SMEs)
• The scheme was launched in November, 2009.
Salient Features of Modernization of SMEs
A. Scope and Eligibility Criteria: i- Financing shall be
available only for Balancing, Modernization and
Replacement (BMR) of existing units / projects.
ii- Only SME borrowers, as defined in Prudential
Regulations for SMEs, shall be eligible to avail financing
facilities under the scheme.
iii- For import / purchase of new Rice Husking Machines,
Paddy Driers and Parboiling Plants.
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Salient Features of Modernization of SMEs
B. Period of Financing and Grace Period:
Financing shall be available for a maximum period of
seven years including a maximum grace period of six
months.
C. Participants: Financing facilities shall be provided through
all commercial banks and DFIs.
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Salient Features of Modernization of SMEseme
D. The repayment of financing (principal amount of loan)
shall be made by the borrowers in equal half yearly /
quarterly installments depending upon the tenure for
which the facility is availed. MarkUp / service charges
shall be made quarterly.
E. Fines for Default: (i) In case of violation of the terms &
conditions laid down in the facility the State Bank shall
reserve right to recover the amount of refinance granted
alongwith fine at the rate of paisa 60 per day per Rs
1,000/-. (ii) Late adjustment fine paisa 60 per day per Rs
1,000/-.
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Salient Features of Modernization of SMEseme
Rate of service charges / mark up
Tenor
Rate of
Refinance
Bank’s Spred
End User’s
Rate
Up to 3 years
5.00 %
2.00 %
7.50 %
Over 3 years
and up to 5
years
4.75 %
2.75 %
7.50 %
Over 5 years
and up to 7
years
4.50 %
3.00 %
7.50 %
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• Refinance Scheme for Revival of SMEs &
Agricultural Activities in Flood Affected Areas
of 2014.
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Introduction & Transitional Overview
Refinance Scheme for Revival of SMEs & Agri. Activities In Flood
Affected Areas of 2014.
• The scheme was launched in October, 2014. in order to revive
agricultural activities and facilitate the flow of fresh credit in the
Flood Affected Areas, State Bank of Pakistan is introducing a
concessional financing scheme through banks for agri.
Production/working capital finance to farmers and SMEs in
districts affected by flood of 2014, as reported by National
Disaster Management Authority.
• Under the scheme financing will be provided at
affordable/concessional mark-up rates through banks/DFIs for
which Rs.10 billion has been allocated.
Salient Features of Scheme
1. Agricultural Production Loans to Farmers.
A. Scope and Eligibility Criteria:
i- Agricultural credit shall mean “Farm Credit” and “NonFarm Credit” for meeting production and working capital
requirements, as defined under the Prudential Regulations
for Agriculture Financing.
ii- All categories of farmers (owners, owner-cum-tenants
and tenants) of the specified areas will be eligible for
agricultural loans under the scheme.
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Salient Features of Scheme
A. Scope and Eligibility Criteria:
iii- Bank shall provide agri. loans to farmers as per their
lending policy approved by their Board of Directors and
SBP Rules & Regulations.
iv- Banks are encouraged to arrange for insurance of the
loans provided under the scheme and Mandatory Crop
Loan Insurance for five major crops viz. wheat, rice,
cotton, sugarcane and maize to avoid risk of losses due to
natural calamities.
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Salient Features of Scheme
B. Tenor and Size of Loans.
i- Tenor of the crop production loans and repayment of
the principal amount will be bases on the cropping cycle
up-to a maximum period of one year.
ii- The borrowing limit of farmer shall be fixed by the
bank keeping in view credit requirements, cash flows,
repayment capacity, risk profile of the borrower, etc.
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Salient Features of Scheme
1. Short Term Loans to the SMEs
A. Scope and Eligibility Criteria:
i- Banks may provide Short-Term Loans to SME borrowers,
as defined under the Prudential Regulations for SMEs in
Flood Affected Districts.
ii- Bank shall provide financing facilities as per their
lending policy approved by their Board of Directors and
SBP Rules & Regulation
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Salient Features of Scheme
B. Tenor and Size of Loans.
i- Bank shall provide short term loans for working capital
requirements of SMEs for a maximum period of one year.
ii- The borrowing limit of SMEs shall be fixed by the bank
keeping in view credit requirements, cash flows,
repayment capacity, risk profile of the borrower, etc.
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Salient Features of Scheme
D. Principal amount of loans under the scheme shall have to
be repaid on agreed date between bank and the borrower
within a maximum period of one year. Markup / service
charges shall be made quarterly in case of financing to
SMEs. However, mark up on agri. Loans shall be paid on
half yearly basis.
E. Fines for Default: (i) In case of violation of the terms &
conditions laid down in the facility the State Bank shall
reserve right to recover the amount of refinance granted
alongwith fine at the rate of paisa 60 per day per Rs
1,000/-. (ii) Late adjustment fine paisa 60 per day per Rs
1,000/-.
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Salient Features of Scheme
Rate of service charges / mark up
Tenor
Rate of
Refinance
Bank’s Spred
End User’s
Rate
Up to 1 year
4.50 %
3.00 %
7.50 %
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• Export Finance Facility for Locally
Manufactured Machinery (EFF-LMM)
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Introduction & Transitional Overview
Export Finance Facility for Locally Manufactured Machinery (EFFLMM)
• The scheme was launched in January, 2013. With a view to
promote the export of locally manufactured plant & machinery ,
The State Bank of Pakistan has decided to introduce the Export
Finance Facility for locally manufactured machinery (EFF-LMM).
The exporters can avail long term financing facilities through
banks for export of eligible plant & machinery and engineering
goods under the facility.
Introduction & Transitional Overview
• Financing facilities shall be available both at pre-shipment and
post-shipment stages.
• Bank’s spread is being increased to encourage them to extend
financing to the non-traditional exporters i.e. Engineering Goods.
Salient Features of Scheme
Tenor and Size of Loans.
i- Financing facilities shall be available for a maximum
period of five years.
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Salient Features of Scheme
Rate of service charges / mark up
Tenor
Rate of
Refinance
Bank’s Spred
End User’s
Rate
Up to 3 years
5.50 %
2.00 %
7.50 %
Over 3 years
and up to 5
years
5.00 %
2.50 %
7.50 %
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Thank You!
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