Textile Sector Receives Rs176 bn Under EFS

Further, Textile Sector has availed refinance amounting to Rs 54 billion under Long Term Financing for Export Oriented Projects (LTF-EOP) Scheme since its inception in May 2004 to February 15, 2008 at a fixed rate of mark up of either 6% or 7% for the full tenure of the loan which can extend up to 7-1/2 years. The above-referred facts are sufficient to dispel an impression, created by a news item published in a section of the press, that the SBP Governor while addressing a meeting of Federation of Pakistan Chambers of Commerce and Industry (FPCCI) recently has refused provision of financial assistance with low mark up for textile industry.

It may be pointed out that pursuant to release of the monetary policy statement for January – June 2008, the State Bank held many focused discussions with the stakeholders including FPCCI. During these meetings and discussions SBP explained that the monetary tightening was carried out to contain macro economic imbalances creating inflationary pressures in the economy. As regards provisions of low mark-up financing to the textile industry, it is reiterated that textile sector has always been one of the major beneficiaries of the incentives provided by the SBP in the shape of its various Schemes i.e. EFS, LTF-EOP, LTFF.

The value-added sectors of the Textile Group have remained the major beneficiaries of the refinance granted under these schemes. Therefore, it is incorrect to assume that the SBP is not providing long term financing to the value added textile sector; in fact LTTF is available to value added sector including Fabrics, Garments, Made up, Towels, and Art silk & synthetic textiles sub sectors of Textile Sector.

Source: State Bank of Pakistan