Insurance Scheme Prime Minister of Pakistan’s “Export-Led Economic Growth” Vision…

Insurance Scheme under the Prime Minister of Pakistan’s “Export-Led Economic Growth” Vision…
(Asghar Ali Mubarak)
Under the directive of Prime Minister Muhammad Shehbaz Sharif and in line with the vision of “export-led economic growth,” a nationwide campaign for a joint export insurance scheme—launched by the Pakistan EXIM Bank and the Export Development Fund (EDF) for SMEs—is set to begin on November 1st.
The Export-Import Bank of Pakistan (Pak EXIM) and the Export Development Fund (EDF) have established a joint “Pakistan Export Credit Risk-Sharing Pool” for SME exporters. A formal product brief regarding this initiative has been issued by Kashif Ahmed, the Communications Manager at Pak EXIM. A high-level meeting concerning the Export Development Fund (EDF) was held in Lahore on September 5, 2026, presided over by Prime Minister Muhammad Shehbaz Sharif. During the meeting, the Prime Minister welcomed the launch of export insurance coverage by the EDF and Pak EXIM Bank, stating that this facility would assist Small and Medium-sized Enterprises (SMEs) in boosting their exports.
The Prime Minister was briefed that the EDF has undergone restructuring, with its leadership entrusted to private-sector professionals. The entire fund of Rs 24 billion held by the EDF has been allocated for investment to facilitate the business community, and no additional expenditures will be incurred on infrastructure. The government signed two export financing agreements. A reinsurance partnership agreement between Pak Exim Bank and the ‘Islamic Corporation for the Insurance of Investment and Export Credit’ (ICIEC) was signed by ICIEC CEO Dr. Khalid Khalafalla and Pak Exim President Shahbaz Hussain Syed.
Additionally, an agreement for a PKR 3 billion ‘SME Risk Pool’ between the Export Development Fund (EDF) and Pak Exim was signed by EDF Chairman Umar Saeed and Pak Exim President Shahbaz Hussain Syed.
It is worth noting that HBL and the Export-Import Bank of Pakistan (EXIM Bank) have established ‘Bank Master Policy’ (BMP) arrangements to provide export credit insurance solutions to Pakistani exporters.
Under the Bank Master Policy framework, EXIM Bank will provide credit insurance coverage on the export receivables of eligible exporters. This will enable HBL to assist exporters more effectively by utilizing the Bank Master Policy.
This arrangement represents a significant step toward strengthening Pakistan’s export finance ecosystem and builds upon the commitment of both HBL and EXIM Bank to support the country’s exporters. Through this collaboration, both institutions aim to improve access to finance, instill greater confidence in exporters seeking to enter new markets and engage with new buyers, provide new exporters with access to export insurance coverage, and contribute to the sustainable expansion of Pakistan’s export sector. Speaking on the occasion, Shahbaz Hussain Syed, President of EXIM Bank of Pakistan, said, “Signing the Bank Master Policy with HBL marks a significant milestone for EXIM Bank and a strong start for our Bank Master Policy portfolio. It reflects the financial industry’s growing confidence in EXIM Bank’s insurance solutions and demonstrates our shared commitment to boosting Pakistan’s exports. Coupled with our recent reinsurance agreement, this reinforces our strategy of building partnerships that grow from strength to strength.” Commenting on this partnership, Muhammad Nasir Salim, President and CEO of HBL, stated, “This arrangement marks another significant step toward supporting Pakistan’s exporters. HBL brings its expertise in trade and export finance to the table, while EXIM Bank’s credit insurance capabilities help strengthen our risk-taking capacity and instill greater confidence in Pakistani exporters. Together, we can generate business and opportunities in international markets, thereby contributing to sustainable export growth and Pakistan’s economic development.” The signing ceremony took place during the EXIM Bank and ICIEC Exporters’ Gathering in Karachi and was attended by senior representatives from HBL, EXIM Bank, ICIEC, and Pakistan’s exporting community.
Under this framework—modeled on the British system—Pak EXIM (Ministry of Finance) and the EDF (Ministry of Commerce) have signed a Master Export Insurance Framework Agreement. This initiative will provide export credit insurance to Pakistani SMEs, offering protection against the risk of non-payment by international buyers—whether due to commercial or political risks. Pak-Exim’s post-shipment insurance addresses this risk, enabling SMEs to negotiate better terms with new buyers, accept larger orders, and enter new markets with confidence.
Two products are being introduced:
1- Comprehensive Short-Term Policy (CSTP): Issued directly to eligible SME exporters.
2- Bank Master Policy (BMP): Issued to the relevant banks or DFIs that are financing the SMEs.
The coverage includes commercial risks (such as buyer insolvency or failure to pay on time) and political risks (where payment is halted due to government actions or events in the buyer’s country).
However, it is clarified that this does not imply coverage for every shipment, invoice, or loss; claims will be processed in accordance with the policy terms, eligibility criteria, and approved limits. The scheme is expected to launch on November 1, 2026, and a nationwide media campaign will be conducted through the Ministry of Information and Broadcasting. Promotional material will be displayed at the branches of participating banks and on social media, while nationwide roadshows will be organized in collaboration with Chambers of Commerce to directly reach SMEs. According to officials, this initiative is part of the Prime Minister’s vision of “export-led economic growth,” aimed at making SMEs competitive in the global market.
It is noteworthy that a high-level meeting regarding the Export Development Fund (EDF) was held in Lahore on September 5, 2026, presided over by Prime Minister Muhammad Shehbaz Sharif. During the meeting, the Prime Minister welcomed the launch of export insurance coverage by the EDF and Pak EXIM Bank, stating that this facility would assist Small and Medium Enterprises (SMEs) in increasing their exports.
The Prime Minister was briefed that the EDF has been restructured and its leadership entrusted to private-sector professionals. The entire corpus of Rs 24 billion held by the EDF has been allocated for investment to facilitate the business community, and no additional expenditures will be incurred on infrastructure.
The government signed two export financing agreements; specifically, a reinsurance partnership agreement between Pak EXIM Bank and the ‘Islamic Corporation for the Insurance of Investment and Export Credit’ (ICIEC) was signed by ICIEC CEO Dr. Khalid Khalafalla and Pak EXIM President Shahbaz Hussain Syed. Umar Saeed, Chairman of the Export Development Fund (EDF), and Shahbaz Hussain Syed, President of EXIM Bank Pakistan, signed an agreement establishing a PKR 3 billion ‘SME Risk Pool’ between the EDF and EXIM Bank.
It is worth noting that HBL and the Export-Import Bank of Pakistan (EXIM Bank) have entered into a Bank Master Policy (BMP) arrangement to provide export credit insurance solutions to Pakistani exporters.
Under the Bank Master Policy framework, EXIM Bank will provide credit insurance coverage on the export receivables of eligible exporters. This will enable HBL to support exporters more effectively by utilizing the Bank Master Policy.
This arrangement represents a significant step toward strengthening Pakistan’s export finance ecosystem and builds upon the commitment of both HBL and EXIM Bank to support the country’s exporters. Through this collaboration, both institutions aim to improve access to finance, instill greater confidence in exporters seeking to enter new markets and engage with new buyers, provide new exporters with access to export insurance coverage, and contribute to the sustainable expansion of Pakistan’s export sector.
It is worth noting that HBL and the Export-Import Bank of Pakistan (EXIM Bank) have entered into a Bank Master Policy (BMP) arrangement to provide export credit insurance solutions to Pakistani exporters.
Under the Bank Master Policy framework, EXIM Bank will provide credit insurance coverage on the export receivables of eligible exporters. This will enable HBL to assist exporters more effectively using the Bank Master Policy. This arrangement marks a significant step toward strengthening Pakistan’s export finance ecosystem and builds upon the commitment of both HBL and EXIM Bank to support the country’s exporters. Through this collaboration, the institutions aim to enhance access to finance, instill greater confidence in exporters seeking to enter new markets and engage with new buyers, provide new exporters with access to export cover, and contribute to the sustainable expansion of Pakistan’s export sector.
Speaking on the occasion, Shahbaz Hussain Syed, President of EXIM Bank of Pakistan, stated, “Signing the Bank Master Policy with HBL is a major milestone for EXIM Bank and a strong start for our Bank Master Policy portfolio. It reflects the financial industry’s growing confidence in EXIM Bank’s insurance solutions and demonstrates our shared commitment to boosting Pakistan’s exports. Coupled with our recent reinsurance agreement, this reinforces our strategy of building partnerships that grow from strength to strength.” Commenting on this partnership, Muhammad Nasir Salim, President and CEO of HBL, stated, “This arrangement marks another significant step toward supporting Pakistan’s exporters. HBL brings its expertise in trade and export finance to the table, while EXIM Bank’s credit insurance capabilities help strengthen our risk-taking capacity and instill greater confidence in Pakistani exporters. Together, we can generate business and opportunities in international markets, fostering sustainable export growth and contributing to Pakistan’s economic development.” The signing ceremony took place during the EXIM Bank and ICIEC Exporters’ Gathering in Karachi, attended by senior representatives from HBL, EXIM Bank, ICIEC, and Pakistan’s exporting community. Meanwhile, Prime Minister Shehbaz Sharif welcomed the provision of export insurance coverage—specifically for Small and Medium-sized Enterprises (SMEs)—by the Export Development Fund (EDF) and the Export-Import Bank of Pakistan (EXIM Bank). He noted that this initiative would help boost the country’s exports and strengthen export-led economic growth. The Prime Minister remarked that the PKR 3 billion risk pool would facilitate export credit insurance, particularly for SMEs, enabling the business community to increase export volumes. He hailed the move as a highly welcome step toward promoting small and medium-sized businesses in the country and commended the EDF team for implementing reforms aimed at strengthening the national economy. The Prime Minister added that following its restructuring and reform… The leadership of the EDF has been entrusted to private sector professionals. It was further stated that all funds available to the EDF are being utilized to facilitate the business community and support initiatives that boost economic activity.
The Prime Minister remarked, “These measures reflect the Government of Pakistan’s commitment to boosting the national economy and increasing exports,” adding that such steps would help Pakistan emerge as a global investment hub. The government’s actions are focused on realizing the goal of an export-oriented economy, encompassing maximum support for the business community and opportunities to expand Pakistan’s presence in international markets. The Prime Minister was briefed on the restructuring and reforms of the Export Development Fund (EDF) and informed that the entire sum of Rs 24 billion held by the EDF has been allocated for investment to facilitate the business community. No additional expenditure will be incurred on infrastructure; instead, the EDF is undertaking initiatives related to research, skills development, and enhancing competitiveness to foster economic growth and ease of doing business. Measures are also being taken to extend Pakistan’s preferential trade agreement under GSP Plus status, ensuring the country retains access to European markets. The meeting was attended by Deputy Prime Minister and Foreign Minister Mohammad Ishaq Dar; Federal Ministers Muhammad Aurangzeb, Rana Tanveer Hussain, Jam Kamal Khan, and Ahad Khan Cheema; Minister of State for Finance Bilal Azhar Kayani; Prime Minister’s Advisor Haroon Akhtar; EDF Board Chairman Umar Saeed; and senior officials from relevant institutions. Furthermore, a new insurance scheme for SMEs… It protects against export-related losses. Pakistan has launched a first-of-its-kind insurance scheme to shield Small and Medium-sized Enterprises (SMEs) from financial risks associated with exports, thereby removing a long-standing barrier that had kept many small firms out of international markets. Introduced jointly by Pak Exim and the Export Development Fund, this initiative safeguards SME exporters against losses incurred if overseas buyers fail to pay for goods already shipped. Historically, the risk of non-payment has discouraged small manufacturers and exporters from accepting large international orders or entering unfamiliar markets, as a single defaulting buyer could wipe out a firm’s profit margins or even threaten its survival. By absorbing this risk, the new scheme aims to give SMEs the confidence to pursue larger contracts and diversify their overseas buyer base. A risk pool valued at approximately PKR 3 billion will underpin the scheme.It is jointly funded by Pak Exim and the Export Development Fund. The Islamic Corporation for the Insurance of Investment and Export Credit is providing international backing, thereby enhancing the program’s credibility with foreign buyers and lenders. Pak Exim has also established offices in Sialkot and Faisalabad—two of Pakistan’s major export-manufacturing hubs—to assist SME exporters with registration for coverage and to provide guidance on the claims process. The scheme is expected to boost SME export volumes, generate higher output and employment opportunities, and contribute to Pakistan’s foreign exchange reserves at a time when the country is striving to diversify its export base beyond a handful of large corporate exporters. Mian Zahid Hussain—President of the Pakistan Businessmen and Intellectuals Forum and All Karachi Industrial Alliance, Chairman of the National Business Group Pakistan, and Chairman of the FPCCI Policy Advisory Board—has welcomed the Rs 3 billion export insurance risk pool and export expansion financing facility established for SMEs through the Export Development Fund and Exim Bank of Pakistan. Commending the endorsement by Prime Minister Shehbaz Sharif and the efforts of Finance Minister Muhammad Aurangzeb, the EDF, and Exim Bank, he stated that these measures would mitigate payment risks and improve access to working capital. In the 2025-26 fiscal year, Pakistan’s merchandise exports declined by 5.97 percent to $30.1 billion, while imports reached $69.6 billion, causing the trade deficit to widen by 21.57 percent to $39.5 billion. Remittances of $41.6 billion from overseas Pakistanis provided crucial foreign exchange support, helping to bridge the trade gap. This reliance underscores the need for greater value addition, a broader export base, and access to new markets. The 50 percent increase in the Export Finance Scheme allocation—raising it from Rs1 trillion to Rs1.5 trillion for the 2026-27 fiscal year—was welcomed. The allocation of Rs300 billion for SME exporters, agricultural SMEs, and new borrowers, made under the Prime Minister’s directive, was also commended. Eligible businesses can access this financing through banks and financial institutions. Timely availability of funds will boost production and facilitate the fulfillment of overseas orders; the facility will support the acquisition of new machinery (both locally manufactured and imported), the modernization of existing plant and machinery, production enhancements, and the replacement of obsolete equipment. Industrial modernization can enable more environmentally sustainable production and assist Pakistani exporters in meeting the environmental standards required by international buyers. Small businesses are often reluctant to accept orders from new buyers because non-payment can severely impact wages, supplier payments, and production activities. A collective insurance risk pool of Rs 3 billion will provide protection against the risk of non-payment, while financing schemes will meet working capital requirements.