The State Bank of Pakistan (SBP) is set to tighten oversight of export finance schemes after the Economic Coordination Committee (ECC) approved an Rs88 billion subsidy package for fiscal year 2026-27 aimed at boosting exports while reducing the risk of misuse.
The package includes an expanded Export Finance Scheme (EFS), a new Rs350 billion Long Term Export Growth Financing Facility, and performance-based rebates for exporters that achieve higher export growth.
Under the expanded EFS, the financing portfolio will increase from Rs1 trillion to Rs1.5 trillion. The scheme will provide working capital financing for up to 180 days to exporters of value-added goods.
The proposed Long Term Export Growth Financing Facility will replace the existing Export Long Term Financing Facility and support new export-oriented projects, as well as balancing, modernization and replacement projects.
The facility will target businesses with at least 80% export orientation and provide subsidized fixed-rate financing for a period of up to 10 years.
The government estimates the total subsidy requirement for the long-term facility at Rs195.98 billion, including Rs25.16 billion during FY2026-27.
The government will also introduce a performance-based rebate on incremental exports from July 1, 2026. The initiative is expected to cost around Rs15 billion during FY27, with approximately Rs10 billion expected to be utilized during the current fiscal year.
Exporters achieving growth of up to 10% over the previous year will qualify for a rebate equivalent to 1% of their incremental exports.
A higher rebate will be offered to exporters recording growth above 10%, although the government has yet to finalize the details of the enhanced incentive.
To accelerate payments, exporters whose average quarterly exports exceed their previous year’s average will receive 75% of the applicable rebate provisionally.
Final payments will be adjusted at the end of the fiscal year. Exporters that fail to meet their annual targets will be required to return provisional payments within 15 days.
The ECC has directed the SBP to strengthen safeguards across the export financing schemes. These measures include setting limits on financing for individual parties, increasing participation by small and medium-sized enterprises (SMEs) and promoting diversification of export products and markets.
The central bank has also been tasked with closely monitoring the schemes and preventing their misuse.
The government aims to use the revised framework to address weaknesses identified in previous export subsidy programmes while ensuring that financial support reaches businesses capable of generating sustainable export growth.
The measures are expected to provide exporters with greater access to working capital and long-term financing while linking government support more closely to actual export performance.
