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State Bank Credit Incentive Schemes
A-
Export Finance Scheme (EFS)
This is short-term working capital
facility for 180 days to increase the exports. The scheme operates
in two parts. Part-1 is the Transaction Based, while Part-II is
Performance Based.
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Part-I |
Part-II |
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Transaction based facility
Coverage to the extent of 100% of export
order/LC/contract.
Facility is available at both Pre & Post shipment stages to
DE
Facility available to IE at Pre-shipment stage only
Facility available to
- Direct Exporters : 180 days
- Indirect Exporters: 120 days
Performance required against every transaction. |
Performance based facility
Facility is available to Direct Exporters only but not to
Indirect Exporters
Exporters are allowed a revolving cash credit limit
equivalent to 50% of their total value of goods exported in
the previous year.
Performance is determined on the basis of EE-1 statement
that includes export of eligible items made in previous year
under both parts of EFS
The exporter can avail facility for the maximum period of
180 days. |
Objectives of the EFS
Eligibility Criteria for EFS:
Facilities under EFS are available for
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Value added commodities
except those mentioned in the Negative List
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Direct Exporters (those
who export directly)
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Indirect Exporters (who
are input supplier to Direct Exporters)
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Small, Medium and Emerging
Exporters
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Commercial Exporters &
Trading Companies
Coverage of the EFS
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Medical & Pharmaceuticals |
Transportation, Communication, Storage & Tele-communication
Services
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Engineering |
Educational Services |
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Accountancy & Management |
Hotel & Tourism related Services |
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Financial Services |
Marketing & Promotional Activities |
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Wholesale, Distribution & Retail Trade Services |
Software & IT related Services |
|
Gold Jewellery (self consignment)
All eligible goods exported to EPZs |
Goods for display in International fair & Exhibition on Post
shipment basis |
Mark-up Rate under EFS
-
Mark up rate under EFS is
fixed on monthly basis.
-
Current Mark up rate is 7.5%
plus Spread of Banks, which is 1%.
Pre-requisite Documents
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Application
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Duplicate Copy of EE-I
Statement
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Demand Promissory Note from
exporters (DP Note)
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Undertaking
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Direct Exporters are liable to
submit the documents within 30 days from the date of
shipment, while Indirect Exporters within 15 days of the
supply of goods to the Direct Exporters.
Repayment by the Exporter & Bank
180 days from the date of Shipment
Earlier, if export proceeds are
realized before the expiry of the 180 days period.
Banks have to repay refinance within
three working days of the realization/expiry of loan, failing which
their account will be debited by the concerned SBP, BSC Offices.
BACK
B-
LTF-EOP Scheme
Scheme for Long Term Financing for the Export Oriented
Projects (LTF-EOP)”
would allow the eligible financial institutions to provide funding
facilities to the export oriented units, who meet the financing
criteria, on attractive terms and conditions for import of
machinery, plant, equipments and accessories (not manufactured
locally).
Objectives of the Scheme
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Preparation under the trade
liberalized era
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To help sustained growth of
exports
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To help SMEs to meet the
challenges of WTO regime
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To help SMEs to enhance their
production potential for exports
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Enhancement of existing
manufacturing facilities
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Synchronization of trade
policy incentives
Salient features of the Scheme
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Exporters for import of
machinery, plant, equipments, etc for setting up new units
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Up-grade the existing units-BMR
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Meet the needs of the
borrowers from the SME Sector
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All types of machinery is
eligible, however, in case of spinning only those sub
sectors are eligible that add value
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Maximum period of financing is
7 ½ years
Facilities under the Scheme are not
available :-
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For financing machinery
already imported for ongoing projects
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For equipments/accessories
which are not integral part of the machinery required by the
borrower
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To commercial importers or
trading houses
Interest Rate Incentive
Interest rate is determined
annually, however, the borrower is required to repay the loan at
markup that was applicable at the time of disbursement of loan i.e.
borrower will repay the loan at a fixed rate for the whole period of
loan.
Mark up Rates under LTF-EOP
|
Tenure
(inclusive of grace period) |
Linked
with |
*Rates
for PFIs |
*Rates
for Borrowers |
|
Up to
2 Years |
Weighted Avg. Yields on 12 month T-bills |
4%
p.a. |
6%
p.a. |
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Over 2
but upto 3 Years |
on 3
Years PIBs |
4%
p.a. |
6%
p.a. |
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Over 3
and up to 7-1/2 Years |
on 5
Years PIBs |
5%
p.a. |
7%
p.a. |
Eligibility Criteria :
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Projects / units eligible for
financing under the Scheme must have;
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at least 50% exports of their
annual production direct or indirect
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Debt/Equity Ratio is 80:20
(maximum debt will be 80% of total borrowings)
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Borrower have no export
overdue bills of more than 365 days
Scope of the Scheme
-
Facilities under the Scheme
are available all over the country.
-
Facilities under the Scheme
are also available to those exporters who are eligible to
avail incentives of export development schemes announced by
the Ministry of Commerce & EPB
Banks/DFIs Eligible to Grant Finances
All
banks/DFIs are eligible to grant finance under the Scheme subject to
their approval as Participating Financial Institutions (PFIs) by SBP.
Repayment of Finance/Refinance
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Loan is repayable in
half-yearly or quarterly installments. Scheme provides
multiple options of repayments:
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Upto 2 years (without any
graces period)
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Over 2-3 years (including
grace period of 6 months)
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Over 3-5 years (including a
grace period of 1 year)
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Over 5-7½ years (including a
grace period of 1½ years)
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Upto 5 Years for acquisition
of brands & franchises (without any graces
period)
BACK
C- Locally
Manufactured Machinery (LMM)
The scheme
was introduced to induce the industrialists desirous to set up
projects/industries in Pakistan based on locally manufactured
machinery
(LMM) creating effective demand for the machinery items
manufactured/assembled in Pakistan. The scheme can play a pivotal
role in the development of Engineering Sector in Pakistan.
Objectives of the Scheme
Eligibility Criteria :
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Scheme for Locally
Manufactured Machinery (LMM)
includes
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Only those plants, machinery,
equipment, transport equipment, cargo vessels ships,
fixtures, fittings and accessories, which are to be used for
industrial applications for processing in Pakistan.
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Machine having 20% cost of
imported components-eligible for 100% financing
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Machine having more than 80%
imported components-not qualify for financing
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Presently,
24 industries are eligible for financing under the scheme.
Financing
Financing is available to both manufacturers & purchasers. The
repayment period, under the scheme has been kept flexible ranging:
6 months to 2 years for manufacturers
and 7 ½ years for purchasers of the locally manufactured machinery.
Mark-up Rate under LMM
Participating Financial Institutions (PFI) (Banks, DFIs,
Investment Banks, Leasing Companies & Modaraba) are eligible to
grant the finance, while the SBP will perform as a regulatory body.
Rate of Finance:
7.5% p.a
Rate of Refinance: 6.5%
p.a
State Bank of Pakistan under SMED
Circular No.15 dated 14th July, 2006 announced
that the existing scheme for financing Locally Manufactured
Machinery (LMM) is being merged with scheme for Long Term Financing
for the Export-Oriented Projects (LTF-EOP) to provide a level
playing field to exporters for setting up and Balancing,
Modernization and Replacement (BMR) of Export Oriented
Projects/Units. The new proposed scheme titled as “Long Term
Financing Scheme for Imported & Locally Manufactured Machinery”
is being finalized and would replace the existing LTF-EOP and LMM
Schemes. BACK
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