KARACHI, Dec 14: The Export Promotion Bureau (EPB) has convened a tripartite meeting on December 23 of State Bank of Pakistan (SBP), commercial banks and representatives of small and medium enterprises to look into the demand of SMEs for providing finance against usance bills.

The meeting has been arranged by EPB director Ayesha Humera on the demand made by convener of Union of Small and Medium Enterprises (Unisame), Zulfikar Thaver.

The SMEs had been demanding that a solution should be found to resolve their problem of getting finance against usance bill.

This system of export of goods under ‘Documents on Acceptance’ (D/A) basis is widely practised the world over and India is one of the leading countries which is taking full advantage of this system to promote it exports.

However, Pakistani exporters are unable to capture such markets where foreign buyers seek purchase of goods under D/A basis and not under letter of credits.

Consequently, they lose such foreign buyers to Indian exporters who are fully backed by their banking system which is being run on collateral management system. In many cases Indian banks also run warehouses where exporters/importers put their goods and get finances from banks against these goods.

The Unisame convener in a meeting with EPB director said that his members are not in a position to meet the requirements of the buyers who are requesting deferred payment facility of up to 30/50/90 days and as a result they lose orders against competitors from India.

He also said the Pakistan Export Finance Guarantee Agency was doing the needful but their guarantee was not acceptable to all the banks even to some banks which were themselves on the consortium and as such “our members from all over Pakistan” are facing difficulties.

He urged upon the EPB to take up the matter and emphasized that all commercial banks should grant this facility of discounting usance bills to exporters and since this facility would be post-shipment the bill itself would be drawn on the basis of bill of lading and serve as collateral.

Mr Thaver further suggested that it should be upto the banks to make pre-shipment assessment of exports and finance them accordingly.

However, the system of collateral management is ideally suited for this purpose and the Export Promotion Bureau should focus on it, he added.