Dfg.docx

DFG Reasons for EFS  credit to promote export (financing and its cost) and to diversify exports (value added). EFS part 1= 100% coverage for 180 days and 85% for 270 days. (The tenor of the facility is up to 180 days with a rollover option for further 90 days subject to showing performance equivalent to 117% of the borrowed amount in case of availing rollover option). Entitlement is determined according to EE-1 statement EFS part 2= revolving limit equivalent to 50% of their total value of previous year EFS part 2= max period 180 days (The maximum tenor of the loan under Part‐II of the scheme is also 180 days which could be rolled over for another 180 days subject to showing at least 70% shipment of loan availed in initial 180 days). Grant of limits by SBP to banks based on=bank’s request, not more than 5% of DTL, SBP’s MP, bank’s financial health and previous utilization. EFS rate i.e. 3% since 2016 has been linked with the weighted average yields on six months T‐Bills w.e.f. 2001. : EFS Facility is also available to the input suppliers/manufacturers of the Direct Exporter, termed as Indirect Exporter (IDE) on the basis of Standardized Purchase Order (SPO) or the Inland Letter of Credit (ILC) to be established by the Direct Exporter against the particular Export Order/Contract/Letter of Credit. IDE will be eligible to avail finance from banks against ILC or SPO, to the extent of the amount mentioned therein. The period of financing by bank to an Indirect Exporter shall be determined as per the terms of the relevant ILC/SPO, but subject to a maximum of 120 days. The scrutiny of documents to be submitted by exporter will be done by the bank concerned. Submit shipping docs= Annexure D EFS has been linked with overdue exports position of an exporter. if overdue export position of an exporter is greater than 5% of the previous year’s exports shown in EE‐1 statements, the exporter would not be entitled to avail the EFS facility till such time that the overdue position is reduced to the 5% benchmark level. Banks take the credit risk under the scheme, and SBP takes exposure on banks.

After the finance has been disbursed by banks, they may make an application to the concerned office of the SBP BSC indicating particulars of Direct / Indirect exporters to whom the bank has granted finance and against which now they intend to avail refinance as per Form “D”. BSC releases the amount accordingly within 48 hours on receipt of the refinance claim as per Form “D” EE-1 It is a statement containing details of exports proceeds realized from the exports of eligible goods by the exporter during last year. EF-1 It is a statement on which performance of the exporter, under part-II, is shown at the end of each year. Exporter is required to show performance by exporting at least twice of its daily average borrowings (EFS-2) FEOD verifies EF-1 and EE-1 at the end of relevant FY IERS (pool exposure to any one sector upto 50%) LTFF   

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available to the export oriented projects with at least 50% of their sales constituting exports or if their annual exports are equivalent to US$ 5 million, whichever is lower. long term finance (in local currency) for imported and locally manufactured new plant and machinery to be used by the export oriented projects Maximum financing of banks/DFIs to a single export oriented unit shall not exceed Rs 1.5 billion under LTFF. However, banks/DFIs may provide financing facilities as per their credit policies over and above the said maximum limit Financing upto 100%

In order to develop the agricultural produce marketing and enhance storage capacity, SBP has decided to float a Scheme for “Financing Facility for Storage of Agricultural Produce (FFSAP)” to encourage Private Sector to establish Silos, Warehouses and Cold Storages.

House finance

Financing provided to individuals for the construction, outright purchase of residential house/apartment, purchase of plot and construction thereupon and renovation. Tangible Security under these PRs means liquid assets, mortgage of land and building, hypothecation or charge on vehicle. Monitor house finance market every six months The banks/DFIs shall not extend housing finance for a tenure exceeding 25 years. The properties valuing upto Rs. 3.0 million should not be subject to assessment by valuator. Banks/DFIs can use their internal resources however the properties valuing more than Rs. 10 million should be subject to assessment by at least two valuators listed on a PBA approved panel. Mortgage by way of equitable or registered mortgage. SME  SBP assigned SME financing targets to banks and DFIs for the first time in 2016. Rs. 685b  SBP launched ‘Credit Guarantee Scheme (CGS) for Small and Rural Enterprises’ in March 2010. Under this scheme, risk coverage of upto 60 percent is provided against credit losses of participating financial institutions on their lending to micro, small and rural enterprises.  Increase SME share from existing 8 percent private sector credit to 17 percent by 2020  the general reserve requirement against unsecured SE financing is 1 percent, while there is no general reserve requirement against secured portfolio  15 working days turnaround time for processing of SE loans. TAT for ME loans has been set at 25 working days  All facilities, except those secured against liquid assets, shall be backed by personal guarantees of the owners of SMEs. In case of limited companies, guarantees of sponsor directors shall be obtained.  Banks & DFIs can take clean exposure (facilities secured solely against personal guarantees) on an SME borrower up to Rs 5 million.

  Per Party Exposure Limit for SE= Rs 25 million  Requirement of Audited Accounts on lending to SE= not required upto Rs 15 million  Banks & DFIs shall maintain general reserve equivalent to 1% of their unsecured SE portfolio

 Per Party Exposure Limit for ME= Rs 200 million  Requirement of Audited Accounts on lending to ME= not req upto 10m NFIS (2015)  NFIS in part of governments 100 day agenda.  NFIS aims to provide financing access to around 50% of the adult population by 2020. The strategy has so far provided 23% of the adult population access to formal financing services compared to 12% in 2008.

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The NFIS envisions that 25% of adult females will have a formal account by 2020 Pakistan accounts for 5.2% of world’s unbanked adult Currently 26% female account holders NFIS objectives= poverty red, fin: stability and ec growth PMIC provides liquidity to MFBs and MFIs Government of Pakistan, being cognizant of the important role played by youth and small businesses in the economic development, introduced Prime Minister’s Youth Business Loans (PMYBL) Scheme in 2013 with the aim of providing youth the opportunities of financial independence through self-employment. Under the Scheme, small businesses are provided loans upto Rs 2,000,000/- at a service charge of 6 percent.

Agriculture  Banks/DFIs are strictly prohibited to undertake any sort of adjustment lending (adjusting the existing loan with a fresh loan) to avoid classification or meet allocated targets for agriculture financing.  While extending agricultural financing, the banks/DFIs should take into account the total indebtedness of the borrower and his disposable income.  Pass book green and red