Pakistan's banking sector has voluntarily cut the markup rate on the Export Refinance Facility (ERF) by 3%, dropping the end-user rate for exporters to 4.50% on all new loans and rollovers, the Pakistan Banks' Association (PBA) announced Wednesday.
This immediate move prioritizes national interest by slashing financing costs for exporters, boosting foreign exchange earnings amid economic recovery efforts. The reduction applies within the current ERF limit of Rs 1,052 billion, which remains flexible up to June 2027 pending adjustments by the State Bank of Pakistan (SBP) or EXIM Bank.
Broader Banking Support for Growth
The initiative underscores banks' role in economic stabilization, with private sector credit surging Rs 1.1 trillion in FY25 more than double FY24's Rs 470 billion covering working capital, fixed investments, SMEs (57% borrower growth, doubled lending), and agriculture (borrower base up to 3 million, record Rs 2.58 trillion disbursed).
In H1 FY26 (Jul-Dec), credit grew another Rs 654 billion (6.75%) despite Rs 1.95 trillion in government borrowing. Banks have also tackled circular debt and aided PIA privatization.
PBA Chairman Zafar Masud emphasized: "Export growth is vital for stability we're delivering capital at 4.50% to back our exporters and the nation." The association thanked SBP and the government, pledging ongoing focus on investor rewards, financial inclusion, and prosperity.
