Pakistan has launched a first-of-its-kind insurance scheme to protect small and medium enterprises (SMEs) from the financial risks of exporting, addressing a long-standing barrier that has kept many smaller firms out of international markets.
The initiative, unveiled jointly by Pak EXIM and the Export Development Fund, will cover SME exporters against losses if overseas buyers fail to pay for goods already shipped.
Non-payment risk has historically discouraged smaller manufacturers and exporters from taking on large international orders or entering unfamiliar markets, since a single defaulting buyer could wipe out a firm’s margins or even threaten its survival.
By absorbing that risk, the new scheme is intended to give SMEs the confidence to pursue bigger contracts and diversify their buyer base abroad.
A risk pool worth nearly Rs3 billion will underpin the scheme, jointly funded by Pak EXIM and the Export Development Fund. The Islamic Corporation for the Insurance of Investment and Export Credit is providing international backing, lending the programme additional credibility with foreign buyers and lenders.
Pak EXIM has also opened facilitation offices in Sialkot and Faisalabad, two of Pakistan’s largest export manufacturing hubs, to help SME exporters register for coverage and understand how claims will work.
Officials say the scheme is expected to lift SME export volumes, support higher production and job creation, and contribute to Pakistan’s foreign exchange reserves at a time when the country is seeking to broaden its export base beyond a handful of large corporate exporters.
