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Govt plans to relaunch export credit guarantee scheme

JAVED MEHMOOD

ISLAMABAD: The government has decided to re-launch export credit guarantee scheme by involving domestic banks, it was learnt.

According to earlier plan, the scheme was to be handled jointly by the National Insurance Corporation and the State Bank. But as the NIC could not handle it properly, the Ministry of Commerce has decided to involve domestic banks along with the central bank in this scheme to make it more effective and viable, sources told Business Recorder.

The foreign and local consultants, having specialisation in the field, are also being hired in next few weeks to undertake the scheme that had been discontinued in the past because of poor results.

"At least two foreign and two to three local consultants will soon be hired to supervise the entire scheme in collaboration with the State Bank of Pakistan and some domestic banks," a senior official of the ministry said.

The Asian Development Bank (ADB) had already allocated a huge amount of foreign exchange for the scheme, while the domestic banks would also be asked by the government to sanction credit, sources said.

The scheme would provide risk cover to the exporters, especially the new ones as a part of the government's plan to encourage the export industry and a financial compensation would be available for those exporters who face losses due to unforeseen circumstances.

Sources said the new exporters face serious financial problems whenever their consignments and payments are stuck up for long because of various reasons. In this situation most of the exporters become bankrupt and abandon their business for ever. But with the re-launching of the Export Credit Guarantee Scheme, the exporters community will be provided financial compensation.

Sources expressed the hope that the scheme would help expand country's export base.