In a significant move to support economic revival, Pakistan’s Banking Sector has voluntarily reduced the markup rate on the Export Refinance Facility (ERF) by 3.0%, bringing it down to 4.50% for new loans and rollovers. This initiative aims to lower the cost of doing business for exporters and enhance foreign exchange earnings. While the ERF limit stands at PKR 1,052 billion, it may increase with support from the State Bank of Pakistan (SBP) or EXIM Bank until June 2027.

The Pakistan Banks Association (PBA) reported substantial growth in private-sector credit, with an increase of Rs. 1.1 trillion in FY25, compared to Rs 470 billion in FY24. The SME borrower base surged by 57%, and agriculture lending reached a record PKR 2.58 trillion, reflecting a sectoral rebound.

This latest rate relief is part of broader banking interventions to stabilise the economy, including efforts to reduce circular debt and facilitate PIA’s privatisation. Mr Zafar Masud, Chairman of the PBA, emphasised the sector’s commitment to supporting economic stability and financial inclusion. The banks are grateful for the ongoing support from the SBP and the Federal Government in implementing these measures.