The government is working to remove the obstacles that keep small and medium enterprises from accessing finance, and a financing facility has now been prepared to support the long-term growth of exports. Minister of State for Finance Bilal Azhar Kayani shared the details while addressing a conference organised by the Sustainable Development Policy Institute in Islamabad. According to a press release issued after the event, exporters can borrow to buy machinery and equipment at an interest rate of 2 percent for the first two years, followed by 5 percent for the remaining eight years. Kayani also pointed to the Export Facilitation Scheme, which lets exporters import inputs without paying duty. He argued that sustainable and inclusive growth depends on higher exports, and that a stronger export base is the way to avoid the boom and bust cycles that have repeatedly affected the economy.
The structure of the loan matters for smaller exporters. A ten year repayment horizon with a low opening rate gives a business room to install new equipment and let it start earning before the higher rate applies, and machinery is typically among the largest expenses an SME faces when it tries to raise output for foreign buyers. The announcement fits into a wider push on export finance this year. The Export Finance Scheme limit has been raised from Rs1,000 billion to Rs1,500 billion for the 2026-27 fiscal year, and Rs300 billion has been set aside for SME exporters, agricultural SMEs and new borrowers, groups that have had limited access to the scheme in the past.
Kayani’s remarks followed a series of consultations in recent weeks. At a meeting at the Finance Division on 29 October, he told participating banks to appoint focal persons, state eligibility requirements clearly and set defined timelines for processing applications, and participants also discussed freight availability, shipping costs and access to productivity enhancing machinery. The same meeting looked at export credit insurance and risk sharing mechanisms for smaller businesses. On 3 November, while chairing the Prime Minister’s committee reviewing the Export Facilitation Scheme, he directed the relevant authorities to clarify and simplify the rules on importing capital goods and manufacturing machinery for exporters. Taken together, the meetings suggest the government is looking at the process of getting a loan or an import approved as closely as the interest rate itself.
That process is where the practical test lies. The press release gave the rates and tenor but did not detail eligibility limits, loan ceilings or which banks will handle applications, and those details will decide how many SMEs can actually use the facility. Banks that name a contact person, publish clear criteria and commit to processing times would address the complaints that exporters have raised in consultations. If those steps follow, the 2 percent opening rate and the duty free input route could together lower the cost of expanding production for smaller exporters, which is the outcome Kayani described as essential to growth that lasts.
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