KARACHI: The major goal of the Export Finance Scheme (EFS) is to increase exports. The EFS is a policy that provides finance to exporters.

Exporters of manufacturing items, particularly exporters of value-added goods, can access these funding options through banks.

The State Bank of Pakistan has raised the markup on credit facilities from 5.5 percent to 7.5 percent per annum. The Employers Federation of Pakistan has sharply criticised the State Bank of Pakistan’s action, which comes as the country faces an economic crisis and a deteriorating balance of payments.

The president of EFP, Ismail Suttar said: “This decision by the government will only cause more difficulties for the exporters. At this time of economic turmoil, Pakistan should focus on increasing exports and the government should provide support rather than marking up rates in the export finance scheme”.

Exporters will be discouraged by the increase in the EFS markup because it will raise the expenses of exporting goods. Pakistan is in desperate need of foreign reserves, so exporters must be given further incentives.

Ismail Suttar also stated: “We have one of the highest markup rates in the South Asian region. Exports will help Pakistan’s economy recover, will lead to a better BOP and will thus help Pakistan revive itself from the current economic crisis.”