Export Finance Scheme (EFS) is a concessional short term financing facility provided to exporters through Bank Alfalah for exports of manufacturing goods and services especially value added products.

Objective:

• To boost the country’s exports by providing dedicated credit facility to exporters.

Salient Features:

Financing under EFS is available to:

• Direct exporters including manufacturers, trading companies and new exporters.
• Indirect exporters

Markup Rate:

• Financing is provided at concessional markup rates. Current markup rate is 4.5% p.a.

Operation of the Scheme:

• The Scheme operates in two parts viz Part-I and Part-II.

Part I

• Exporters can avail financing on case-to-case basis at pre-shipment and/or post-shipment stage against Firm Export Contract/LCs. The exporter has to show export performance equivalent to the loan amount.
• The tenor of the facility is up to 180 days with a rollover option for further 90 days.
• In case of availing rollover option of further 90 days, exporter is required to show export performance equivalent to 117% of the borrowed amount (SMEFD Circular No. 4/2009).

Pre-requisite Documents

1. Copy of Export Contract/LC
2. Form “B” Application for finance by exporter.
3. Demand Promissory Note
4. Undertaking

Part II

• Each exporter is entitled to get annual revolving export finance limit equal to 50% of the export proceeds realized through export of eligible commodities in the preceding financial year export of eligible commodities in the preceding financial year (July-June basis)
• Exporters are required to show two times export performance annually of commodities eligible under the Scheme against total loan (daily product basis) availed during the financial year.
• The maximum tenor of the loan under Part-II of the scheme is also 180 days which may be rolled over for another 180 days subject to showing at least 70% shipment of loan availed in initial 180 days.

Performance based Markup rate benefit:

• Markup rates are linked with performance, wherein lower rates are charged from exporters who achieve higher level of export performance. This benefit ranges from 0.5-1.5 percentage points for corporate sector and 1-2 percentage points for SMEs depending upon the level of performance achieved

Coverage of the Scheme:

• Financing under the Scheme is provided to exporters for exports of all manufacturing goods especially value added products with the exception of basic & primary commodities/raw materials; like, raw cotton/yarn, crude
  materials ect, as mentioned in Negative List.
• Financing is also available for exports of services, like:
  • Consultancy Services.
  • Software & IT related services.
  • International Fairs/Exhibitions.

Fine:

• In case of failure to show required exports against borrowing and noncompliance with provisions of the Scheme, fine as prescribed under the Scheme is recovered.

Refund of fine procedure:

• A refund procedure has been developed to examine requests of exporters for refund of fine in case of failure to achieve the required export performance due to force majeure event/ beyond the control situation.