Pakistan Trade Enhancement Facility II (PTEF2)

completed

This proposed facility will enhance the availability of trade finance to Pakistani importers and exporters by helping supplement country limits currently available to commercial banks operating in Pakistan. Given the various adverse economic shocks such as continued impact of September 11, drought, high oil prices and security problems, it is particularly important to maintain trade flows as they contribute significantly to the level of economic activity in Pakistan. IFC’s participation will also help promote confidence in the banking sector at a time where investor confidence is still low, affected by the deterioration in the global economy. The indicator for the project’s development impact will be the degree of utilization and revenues earned from this facility.IFC Role:IFC will play a catalytic role through risk mitigation and credit enhancement. IFC also has a role in increasing the availability and tenor of trade finance to private sector Pakistani businesses but helping to twice leverage ABN''s existing country limits to Pakistan. Through its participation in the project, IFC will continue to promote confidence in Pakistan''s commercial banking sector.A further long term benefit would be the continued downward trend of costs for trade finance in Pakistan.IFC will continue to play a role in assisting local banks improve their disclosure standards through its requirements that local banks provide regular reports to IFC. This also allows IFC to continue to play a role in the commercial banking sector and strengthen its relationships.