Somewhere in Sialkot, a surgical instruments manufacturer is holding a purchase order from a distributor in Frankfurt.

Someone in Washington, DC, is still trying to figure out how to import mangoes from Pakistan without going through the hassle of asking relatives or going through an informal distribution chain, while some kid in Oslo wants to buy a Trionda (the official football of the FIFA World Cup 2026), but just doesn’t know where to get it officially.

The demand in these cases is real, the margins work, and the buyers are willing to pay a premium. The supplier is willing to ship directly, but it doesn’t know how to do the same, and because of this information asymmetry, its bank declines because it isn’t aware of who the buyer is, the working capital cycle does not fit any product on the shelf, and a multitude of other reasons.

Summer transitions to Fall, the orders detailed above lapse. Nothing in the national accounts records this event, yet it is precisely where Pakistan’s export stagnation lives.

Firms are 80pc more likely to qualify for support on traditional products than on new ones

The instinctive policy response to weak exports has always been to throw more money at the problem, but as the Notorious B.I.G once wrote, the more money we come across, the more problems we see. Another refinance line, another subsidy window, or another mark-up support scheme is the reflex response — there is no shortage of loanable funds, but there is a dearth of loanable funds for small and medium enterprises (SMEs), which is compounded by a shortage of structures that convert commercially viable transactions into bankable ones.

It is estimated that the Export Finance Scheme reaches roughly five per cent of exporters, whereas long-term financing under the Long- Term Financing Facility (LT FF) reaches fewer than 1pc, in terms of number of exporters. The top 100 exporters, who account for about 40pc of export value, absorb twothirds of all export finance, and 86pc of LT FF flows into textiles and allied segments.

As per Gonzalo (2024) in “Evaluating the impact of export finance support on firm-level export performance: evidence from Pakistan”, the evaluated impact is real but narrow, as participants grow export volume by seven to 11 percentage points, with no statistically significant effect on the number of products exported or markets served.

Firms are 80pc more likely to qualify for support on traditional products than on new ones. In effect, we finance more of what we already sell, to buyers we already know. Such schemes only finance scale, but do not finance discovery.

The structural arithmetic shows what this has cost us. The average Pakistani exporter ships $1.4 million a year, one-third of Bangladesh’s $3.8m. The median exporter ships just $68,000. Only a third of our smallest exporters move up a size class over five years, against 45pc in Bangladesh and 53pc in China.

Ten products dominate the merchandise basket, and it has barely diversified in two decades. This concentration has survived every exchange rate cycle; it is not a cyclical artefact, but the embedded outcome of how we allocate credit, which is through a spray and pray approach.

The correction, therefore, is not to spread money thinner across the same basket, but to point risk capital deliberately at the low base, ie the HS [Harmonised System] lines where Pakistan’s export value is small relative to demonstrated capability and global demand, and where the marginal rupee of finance changes the trajectory rather than the volume.

The targeting logic is simple to follow, ie rank the tariff lines, strip out the mature chapters that already absorb concessional finance, and identify the top 100 low-base HS codes where the constraint is financeable.

The next step is to discover those firms, and within those segments sit roughly the top 2,000 SMEs, the firms already producing, already shipping something, but stuck below the size class where banks take them seriously.

Growth in exports will not come from financing the same textile mill a hundredth time with concessional capital, but from the two-thousandth SME in the ninety-ninth HS code.

Although simply settling refunds of exporters operating at scale is also a fruit that is not just low-hanging, but actually on the ground.

Each firm can then be matched to one of three discovery pathways which can be a new geography, where an established product enters a market Pakistan barely serves; it can be a new buyer, where a firm graduates from intermediaries to direct counterparties; or a new product, where a firm scales a line from a low base.

Market entry needs 180- to 360-day facilities and certification finance, wherein buyer acquisition needs transaction-matched cover against counterparty risk, while product discovery needs 90- to 270-day working capital plus long-tenor upgrade finance. One refinance rate cannot price all three, but tailored structures can solve these problems and unlock discovery pathways.

This is where credit or trade guarantees unlock some of the value. A discovery-stage transaction fails when any one of five requirements is missing, which can be certification, a firm order, financier-grade documentation, working capital, and the plant upgrade that delivers specification.

These constraints are sequential, as the certification gates the order, the order gates the cash flow, and the cash flow gates the finance.

A partial credit guarantee, wrapped around a properly structured transaction, changes the risk calculus without replacing its judgement.

The lender continues to originate, price, and retain customers, but is more comfortable with a structured approach driven by policy and more directed towards firms actually scaling up, rather than hoping to find diamonds in the rough.

Pakistan’s food portfolio shows the method in granular detail. Pakistan’s top 50 non-rice food products earn $2.94 billion today and could quintuple to $14.7bn over five years. The binding constraints are nameable per HS code, such as quality segregation for maize, cleaning and grading for sesame, sanitary and phytosanitary and approved plants for beef, cold chain for onions and mangoes.

A granular review of data clearly suggests that processed lines already earn 31pc more per kilogram than raw ones ($0.701 against $0.535). None of these is a subsidy problem, but these are price discovery problems that can be solved through targeted capital expenditure, or working capital facilities, rather than vanilla facilities.

The decision in front of policymakers is not whether to spend more on exports. It is whether the next rupee deepens the top 100 exporters, or makes the next 2,000 firms in the next 100 product lines bankable, and scalable enough to quintuple their exports in five years. We already finance the volume, but discovery requires a structure and a thought process that does not belong to the late nineteen hundreds.

The writer is an assistant professor of practice at IBA and CEO of National Credit Guarantee Company Limited.

Published in Dawn, The Business and Finance Weekly, July 20th, 2026