KARACHI, Nov 8: Exporters were found to be apprehensive of the State Bank of Pakistan’s move to revise and increase the scope of Export Finance Scheme (EFS). They felt that the policy did not give an assurance for reduction in the finance rate that had a direct bearing on the viability and competitiveness of businesses in the world market.

“Any change in the EFS or increase in its scope and coverage could misfire by hurting the export-oriented industry’s viability and competitiveness,” a leading garment exporter observed.

The business community is perturbed over sudden increase in EFS rates and feel that it has doubled in a year’s time from 4.38 per cent to 9.64 per cent.

“The current monetary policy only takes care of financial health of banking sector whereas the real sector like industry and exports are under tremendous pressure,” asserted chairman Pakistan Bedwear Exporters Association (PBEA) Shabir Ahmed.

Referring to the SBP’s move to revise the EFS and widen its scope, he said it may bring in some improvement in the documentation but would not benefit export trade which was facing tough competition from countries like China, India and Bangladesh.

He said that the current monetary policy was only promoting non-productive sectors of the economy. “Banks are making huge profits and the SBP has allowed them to have a big spread between what they offer to savers and what they charge from borrowers”, he added.

He said that stock market was also benefiting from the current monetary policy where paper profits were being made without much gain in the real sector. “All such sectors are growing which do not generate employment whereas industry is under tremendous pressure owing to high mark-up rates.”

Javed Chanio, chairman Pakistan Cloth Merchants Association, supported the views of Mr Shabir and felt that the government was insensitive towards the problems being faced by the exporters.

He questioned the unilateral approach of the government and urged that before announcing any changes in a policy the government should listen to concerns of exporters.

Bilal Mulla, chairman Pakistan Readymade Garments Manufacturers and Exporters Association (Prgmea), said the value-added industry was passing through a difficult phase. He felt that cheaper export financing could help the industry cover some of its higher costs.

Pakistan Hosiery Manufacturers Association chairman Javed Bilwani said that changing documentation rules for availing EFS would not boost exports. “We demand of the State Bank to reduce the EFS rate at the earliest.”

He asserted that the SBP had failed to devise a pragmatic monetary policy which could have allowed lower interest rates to prevail at the same time introducing safeguards to check speculators operating in real estate and stock market business.