PakExim and EDF establish Rs3 billion risk pool to protect SME exporters against overseas buyer payment defaults
Pakistan has introduced a new insurance initiative aimed at supporting small and medium enterprise (SME) exporters and strengthening the country’s export sector.
The Export-Import Bank of Pakistan (PakExim), in collaboration with the Export Development Fund (EDF), has launched the SME exporters insurance scheme to provide greater financial security to businesses engaged in international trade.
Under the initiative, SME exporters will, for the first time in Pakistan, receive protection against the risk of non-payment by overseas buyers. The facility is designed to safeguard exporters from potential financial losses when foreign customers fail to make payments for goods or services supplied.
The new insurance mechanism is expected to provide greater confidence to SMEs as they seek to expand their presence in international markets. By reducing payment-related risks, exporters will be better positioned to pursue larger orders and establish business relationships with new buyers abroad.
As part of the initiative, PakExim and EDF will create a risk pool of approximately Rs3 billion. The insurance arrangement will also receive international support from the Islamic Corporation for the Insurance of Investment and Export Credit, strengthening the scheme’s ability to provide export-related protection.
Officials said the initiative could play an important role in expanding Pakistan’s SME export base. With improved protection against overseas payment defaults, smaller businesses are expected to become more willing to explore new destinations and increase the scale of their international operations.
To provide direct assistance to exporters, PakExim has established offices in Sialkot and Faisalabad. SMEs in these major industrial and export-oriented cities will be able to obtain guidance and information about the insurance facility and its requirements.
The government expects the scheme to contribute to higher SME exports while supporting increased production and employment opportunities. Greater export activity could also help Pakistan generate additional foreign exchange and strengthen the overall contribution of small and medium enterprises to the national economy.
The launch marks a significant step toward reducing financial risks for SME exporters and encouraging more Pakistani businesses to compete in global markets.