Karachi: The State Bank of Pakistan (SBP) on Monday increased the upper limit of low-cost financing for the import of machinery and plants by 66.6% to PKR 2.5 billion, a news source reported.
As per sources, this initiative is aimed at promoting investments in export-oriented projects. Previously, the central bank had fixed the limit under for its long-term financing facility (LTFF) and Islamic long-term financing facility (ILTFF) at PKR 1.5 billion.
SBP introduced the long-term refinance facility to promote export-oriented industries in January 2008, in collaboration with commercial banks and other financial institutions.
It provided exporters with the financing that proved pivotal for adopting the latest technologies, and modernising plants and machinery in line with international practices.
The long-term financing facility can be availed for a period of 10 years, which includes a grace period of two years. Similarly, the grace period for availing the financing facility of up to five years is one year.
It is mandatory for export-oriented projects to meet the minimum export target prescribed under the LTFF. This should be equivalent to USD 5 million, or 50% of the company’s sales comprising exports.
