Published on March 10, 2022 2:52 p.m.
SME exporters feel handicapped due to lack of export credit guarantee (ECG): statement
(Web Desk) – The Union of Small and Medium Enterprises (UNISAME) has drawn the attention of policy makers to the lack of facilities for SMEs in exports, especially to Third World countries.
UNISAME President Zulfikar Thaverm said in a statement that exporting SMEs feel handicapped due to lack of Export Credit Guarantee (ECG) and fear to accept orders from third countries world. A full-fledged export credit guarantee is needed to cover losses due to non-realization of revenue and buyers’ refusal to withdraw documentation for goods shipped under firm contracts.
Second, he said the premium rate for insurance under the ECG must be affordable
Thirdly, it is very regrettable that the much talked about Exim Bank has not started operations yet, he added.
Fourth, the union leader lamented that it is very difficult for exporting SMEs to compete globally when our competitors in neighboring countries are fully facilitated by their governments in terms of bank subsidies, insurance and freight.
The UNISAME Board urged the State Bank of Pakistan (SBP) to advise commercial banks to educate their customers to take best precautions and seek endorsement of bills of exchange to cover and secure realization, because many exporting SMEs are unaware of this protective measure.
The UNISAME Board said our exports can multiply if exporters are compensated against transaction losses due to breaches of contract under the much-needed ECG and urged the SBP and the Ministry of Commerce to coordinate and implement a strong ECG program.