Pakistan is moving to strengthen oversight of its export financing programmed as the government seeks to boost foreign sales while reducing the chances of subsidized funds being misused.
The Economic Coordination Committee (ECC) has approved an export finance support package worth Rs88 billion for fiscal year 2026-27, combining expanded working-capital financing, long-term funding for export-oriented investment and incentives tied directly to export growth.
Under the new framework, the Export Finance Scheme (E-EFS) will see its overall financing limit increase from Rs1 trillion to Rs1.5 trillion. The facility is designed primarily to provide working capital to exporters of value-added products, with financing available for periods of up to 180 days.
The government also plans to gradually reduce support for conventional products and markets. EXIM Bank is expected to bring the share of financing allocated to traditional export categories down from around 70% currently to 50% by 2030, encouraging exporters to move toward more diversified and higher-value markets.
New Rs350 Billion Long-Term Export Facility
A major component of the policy is the proposed Rs350 billion Long-Term Export Growth Financing Facility (LTEGFF). The programmed will replace the existing Export Long-Term Financing Facility and focus on new export-oriented projects as well as balancing, modernization and replacement investments.
To qualify, businesses will generally need to have an export orientation of at least 80%. The facility will offer subsidized fixed-rate financing with maturities of up to 10 years, giving exporters greater certainty when making long-term investment decisions.
The overall subsidy associated with LTEGFF is estimated at approximately Rs195.98 billion, including around Rs25.16 billion during FY2026-27.
The initiative is intended to encourage businesses to expand production capacity, modernize equipment and invest in projects capable of generating additional export revenues.
Incentives Linked to Export Growth
The government is also introducing a new performance-based rebate from July 1, 2026. Unlike traditional financing subsidies, this mechanism will reward exporters according to their increase in exports compared with the previous year.
For exporters achieving growth of up to 10%, the rebate will be equivalent to 1% of incremental exports. A higher rate is expected to apply to companies recording growth above 10%, although the final structure is still being worked out.
The government has estimated the cost of the rebate programmed at Rs15 billion for FY2026-27, with approximately Rs10 billion expected to be utilized during the current fiscal year.
To ensure exporters do not have to wait until the end of the year for support, companies that exceed their previous year’s average quarterly export performance will be eligible to receive 75% of their expected rebate on a provisional basis.
The final amount will be calculated after the close of the financial year. Exporters that fail to achieve their required annual targets will have to return the excess provisional payment within 15 days.
SBP to Strengthen Monitoring
Alongside the expansion of financing, the ECC has placed greater responsibility on the State Bank of Pakistan (SBP) to ensure that the schemes are properly administered.
The central bank has been asked to introduce safeguards such as limits on financing available to individual parties, greater access for small and medium-sized enterprises and measures aimed at broadening Pakistan’s export base.
The government also wants the schemes to encourage diversification away from a limited number of products and markets. This is particularly important because excessive concentration can leave exporters vulnerable to changes in international demand, prices and trade policies.
SBP’s monitoring role is also intended to address weaknesses identified in previous subsidy programmed. The objective is to ensure that concessional financing reaches genuine export-oriented businesses rather than being diverted for purposes unrelated to export expansion.
A Shift Toward Performance-Based Export Support
The latest measures represent a broader attempt to make Pakistan’s export support system more targeted and results-oriented.
Instead of relying solely on subsidized credit, the new framework combines financing with measurable export objectives. Long-term funding can help companies modernize and expand, while the performance rebate creates a direct financial incentive to increase exports.
The challenge, however, will be implementation. Strong monitoring, transparent eligibility criteria and timely verification of export performance will be essential if the programmed is to deliver the intended results without creating new opportunities for abuse.
If effectively managed, the package could provide exporters with greater access to affordable financing while encouraging investment, diversification and higher export growth. The success of the programmed will ultimately depend on whether the additional public support translates into sustained increases in Pakistan’s export earnings.