James H. Lambright, executive vice-president of the Export-Import Bank of the United States, on Monday announced that the bank has been opened for short- and medium-term programmes in the private sector for Pakistan. The announcement drew a prolonged applause at a ceremony held at the US Chamber of Commerce organised by the US-Pakistan Business Council. It has been described as a significant move, as it would provide new opportunities for US companies exporting to Pakistan.
Primary benefits include quick turnaround; coverage for purchases of both capital goods and services; attractive interest rates; and flexible repayment schedules.
Dr Salman Shah, Adviser to the Prime Minister on Finance and Economic Affairs, who was the keynote speaker, thanked the Ex-Im Bank for the important announcement.
Governor of State Bank of Pakistan Dr Ishrat Husain, Ambassador Jehangir Karamat, other members of Pakistan''s finance delegation as well as representatives of Boeing GE, OPIC, Motorola, Pepsi, McDonald''s, Citigroup, Gilman group, Eli Lilly and Company, besides the World Bank, IFC, US Trade and Development Agency, Department of Treasury attended the ceremony.
According to the bank''s official sources, the bank now offers financing support in the short- and medium-term to the private sector in Pakistan in addition to being fully available for short-, medium- and long-term.
"This broadened cover policy means US exporters and Pakistan''s private sector buyers can receive financing support from the Ex-Im Bank for transactions with up to five-year repayment terms in the form of loan guarantees, export credit insurance and direct loans."
SHORT-TERM SUPPORT: up to one-year repayment terms; political risk coverage equivalent to 100 percent of contract valid; and 90-95 percent coverage for commercial risk."
"Export credit insurance enables US exporters to extend trade credit directly to Pakistani buyers by covering exporters against both political and commercial risk. Applications to Ex-Im Bank for credit insurance must come from a US exporter. Export credit insurance supports the importation of US goods and services, including raw materials, semi-manufactured, and finished goods."
Sources said, the primary benefits include ''open account'' credit, an attractive substitute to letters of credit; lower costs through reduced interest charges and fees; and available coverage for purchases of bulk commodities, consumer goods, spare parts and other products.
MEDIUM-TERM SUPPORT: up to five-years repayment terms for transactions less than $10 million, providing coverage up to 85 percent of the US contract value.
The bank''s medium-term credit insurance works much like short-term credit insurance and enables US exporters to extend trade credit for up to five years.
The bank guarantees repayment of medium-term loans extended by commercial lenders to Pakistani buyers of US exports.
Loan guarantees help both the private-and public-sector buyers in Pakistan obtain competitive financing for the purchase of US goods and services.
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