KARACHI - The State Bank of Pakistan (SBP) has decided to introduce the Export Finance Facility for Locally Manufactured Machinery (EFF-LMM) with a view to promoting the exports of locally manufactured plant & machinery. This new financing facility shall be effective from January 03, 2013 and remain valid till further instructions.

The exporters can avail long term financing facilities through banks for export of eligible plant & machinery and engineering goods under the facility. Financing facilities shall be available both at pre-shipment and post-shipment stages for a maximum period of five years.

Financing for 5 years (including 1 year grace period) will be available for export of plant & machinery of the value of $10 million or more. Further, specified plant & machinery of the value less than $10 million will be eligible for 3 years (including six months grace period) financing. Other machinery items will be eligible for financing up to 01 year.

Financing shall be available through banks, which are approved as Participating Financial Institutions (PFIs) under the Long Term Financing Facility (LTFF). Requests of new banks shall be processed as per SBP’s criteria. It shall be available against Letter of Credit (LC). However, financing will also be available against export contract for tenor up to one year.

This new financing facility will supersede the instructions concerning Part-B –Export Sales of LMM Scheme as contained in ICD Circular dated 27th April, 1987 read with subsequent amendments made from time to time, says IH&SMEFD Circular of Thursday.