PAKISTAN’S ambition to achieve sustainable export-led growth will remain incomplete unless the country’s small and medium enterprises are given the confidence and financial protection to compete in international markets. For many Pakistani SMEs, the problem is not a lack of products, entrepreneurial talent or foreign demand. The greater challenge is the fear that an overseas buyer may fail to pay after goods have been produced, shipped and delivered. This is precisely where export credit insurance can become a game changer. The recently established Rs.3 billion SME Risk Pool by the Export Development Fund (EDF) and Export-Import Bank of Pakistan (Pak-EXIM) deserves much greater public and business-sector attention. The initiative has been designed to expand access to export credit insurance for SMEs and protect them against non-payment risks. Premier Shehbaz Sharif has welcomed the initiative as an important measure for expanding SME exports and has appreciated EDF reforms aimed at strengthening export-led growth.

Pak-EXIM’s trade credit insurance is designed precisely to address this dilemma. Under its existing Trade Credit Insurance framework, Pak-EXIM provides protection against commercial risks such as buyer insolvency, protracted default and contract-related non-payment, while political-risk coverage can address........

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