Export-insurance risk pool for SMEs welcomed

Mian Zahid Hussain, leader of prominent Pakistani business organizations, has expressed approval for the Rs3 billion export-insurance risk pool for small and medium enterprises, along with expanded export financing, announced by the government. This initiative aims to mitigate payment risks and improve access to capital for exporters.

Despite a decline in Pakistan's merchandise exports by 5.97 percent in FY2025-26, remittances from overseas Pakistanis have helped offset the trade deficit. Hussain emphasized the need for value addition, wider export participation, and access to new markets. He welcomed the increased budget allocation for the Export Finance Scheme and earmarked funds for SME exporters, agricultural SMEs, and new borrowers.

The Long-Term Export Growth Financing Facility, with Rs350 billion in financing lines, would support modernization and environmental sustainability. The insurance risk pool and financing schemes would complement each other in protecting against non-payment risks and meeting working-capital requirements. Hussain also commended the reinsurance agreement between EXIM Bank and ICIEC, and the HBL-EXIM Bank Master Policy, as steps towards strengthening export risk protection.

The SME financing growth and increase in borrowing businesses were noted as positive indicators, but Hussain stressed the need for these gains to translate into higher exports. He highlighted the importance of practical opportunities for new manufacturers, particularly those capable of converting local resources into competitive exports.