IMF rejects Pakistan's proposal to expand export finance scheme

The International Monetary Fund (IMF) has rejected Pakistan's proposal to enhance financing facilities for exporters under the Export Finance Scheme (EFS), sources said Friday.
Pakistan sought IMF approval to further increase financial support for exporters under the EFS, which currently stands at PKR 1 trillion. The IMF declined the request, citing concerns about Pakistan's fiscal stability and the potential strain on financial resources, sources said.
The IMF previously allowed Pakistan to increase the allocation from PKR 778 billion to PKR 1 trillion. However, the global lender remains unwilling to permit additional financial backing, possibly due to concerns about fiscal discipline and sustainability.
Unlike Bangladesh, India and China — where governments allocate billions of dollars annually to support exporters — Pakistan must obtain IMF approval under the conditions of its Extended Fund Facility (EFF) program.
With IMF approval, Pakistan provides a concessional short-term financing facility through the EFS. The scheme benefits exporters, including manufacturers and trading companies, by offering credit via banks to export manufactured goods and services, particularly value-added products.
The EFS aims to boost exports by offering a dedicated credit facility with a tenure of up to 180 days, along with a rollover option for an additional 90 days.