State Bank of Pakistan (SBP) Governor Dr Reza Baqir on Monday said that Pakistan’s export potential is ‘unlimited’, a remark that comes as the central bank strives to promote price stability, financial stability and growth in Pakistan.

Addressing an inauguration ceremony of Service Long March's (SLM) radial bus and truck tyre plant in Karachi, Baqir said he was delighted the company "benefitted from the central bank’s Temporary Economic Refinance Facility (TERF) scheme announced during the Covid pandemic.”

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The SBP had launched TERF back in March 2020 in order to support sustainable economic growth, following businesses being worried about their orders getting cancelled and concerns of recession in the country.

The facility provides concessionary refinance for setting up new industrial units. Refinance under the facility is available through banks and Development Financial Institutions to all sectors.

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Baqir used SLM as a success case for TERF. He said that the company availed $50 million in financing to meet its capital needs and is now expecting to reach annual exports of $300 million. “This is money well spent if giving a certain amount produces a multiple of annual exports for the country,” said Baqir.

The SBP chief, while calling for diversification, said that 60% of the total amount approved in TERF is for the non-textile sector.

Baqir said that apart from financing export-based industries, TERF has also facilitated import-substitution industries. “It is equally helpful for the central bank to promote import substitution because at the end of the day, a dollar exported or a dollar saved helps us in the balance of payments."

He said that to date Rs435 billion has been approved under TERF financing, out of which Rs312 billion had already been disbursed.

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Baqir said that the TERF scheme also benefitted middle-market players, as 50% of the beneficiaries of TERF had a loan size of Rs200 million or less, while 70% of the beneficiaries had a loan size of Rs500 million or less.

“Not only our leading industrial groups of the country benefitted from this scheme, but also the bulk of it is going to the middle-market,” he said.