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Karachi, February 12, 2026: In a significant step aimed at supporting Pakistan’s economic recovery, the country’s banking sector has voluntarily reduced markup rates on the Export Refinance Facility (ERF) by 3 percent. The move lowers the end-user financing rate for exporters to 4.50 percent on all new loans and rollovers, effective immediately.
The decision reflects the banking industry’s commitment to prioritising national interest by reducing the cost of doing business for exporters and strengthening foreign exchange earnings. The reduction applies within the existing ERF limit of PKR 1,052 billion. However, the capacity remains flexible and may be enhanced if the State Bank of Pakistan (SBP) or EXIM Bank revises the limit through June 2027.
According to the Pakistan Banks Association (PBA), the banking sector continues to play a central role in supporting economic revival. In FY25, private sector credit increased by Rs 1.1 trillion, more than double the Rs 470 billion recorded in FY24, indicating robust growth in both working capital and fixed investment financing.
The expansion has been broad-based. The SME borrower base surged by 57 percent, while financing extended to small and medium enterprises doubled over the past two years. Meanwhile, the agriculture sector witnessed a historic rebound, with the borrower base increasing from 2.7 million to nearly 3 million, reversing a declining trend since 2019. Agricultural disbursements reached a record PKR 2.58 trillion.
Private sector credit further expanded by Rs 654 billion, or 6.75 percent, during the first half of FY26 (July–December). This growth came despite substantial fiscal pressures, as banks financed Rs 1.95 trillion in government borrowing during the same period.
The voluntary rate reduction is part of a series of strategic measures undertaken by the banking industry to stabilise the economy. The sector has also played a critical role in addressing circular debt challenges and facilitating the privatisation of Pakistan International Airlines (PIA).
Commenting on the initiative, PBA Chairman Mr Zafar Masud said the measure underscores the banking sector’s responsiveness to national priorities.
“This initiative is not just about numbers; it is about the banking sector answering the call of the nation. Export growth is critical for Pakistan’s economic stability. By offering capital at a competitive rate of 4.50 percent, the sector stands firmly behind the State and our exporters,” he said.
He added that strong credit expansion and record agricultural disbursements demonstrate the industry’s commitment to sustaining economic momentum.
The Pakistan Banks Association also expressed gratitude to the State Bank of Pakistan and the Federal Government for their continued support in facilitating voluntary relief measures aimed at promoting economic growth and financial inclusion.
