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PEFG's Mission:

To materially and significantly enhance new, emerging and growth company access in Pakistan to export trade finance and related credits, through provision of a complete cycle of actuarially-sound repayment guarantees and associated services.

Rationale:
There is a broad consensus among all stakeholders consulted, including local and International Financial Institutions, exporters, industry, trade associations and government within Pakistan, regarding an immediate need for additional and more expeditious access to export-linked short-term financing and related credit support. The consensus is that additional and more expeditious access to such financing and credit support could contribute to strengthening Pakistan's performance in both regional and international export markets. In particular, to mitigate the kinds of financing risks routinely perceived in the export process, from the pre-shipment and working capital stages to post-shipment risk and repatriation of export sales proceeds.

Under terms of Asian Development Bank Loan 1682-PAK, funding has been provided to scope and set up a new organization within Pakistan and develop the institutional capacity to better mitigate export-related financing risk. The aim of this institution-building will be to permit Pakistan exporters and indirect exporters to more successfully compete with their goods and tradable services on World markets. Specifically, in the first phase, by directly offering the very kinds of pre-shipment export finance guarantee support available to foreign competitors, via counterpart institutions. Further, arranging for post-shipment cover, where and when advisable.

Basic Principles:
The Agency's mission is to provide a comprehensive range of export trade finance guarantees to exporters; indirect exporters; or their nominated representatives, focusing on Small and Medium-Sized Exporters (SMES) and growth sectors. Export trade finance guarantee certificates, issued by the Agency, will act as a substitute for traditional repayment collateral or other forms of borrowers' pledge.
For exporters and indirect exporters without any significant collateral or with collateral that fails to meet a financial institution's threshold of 'acceptable' (i.e. in terms of market value, type, assignable), such collateral deficiency can impact and potentially slow down the process of credit access by the exporter or indirect exporter.

Particularly in international trade, where requests to quote often involve limited turnaround- times, promptness to confirm access to pre-shipment working capital must be equally swift. This is especially the case with SMES, who characteristically lack market power, in target export regions, and whose response-time must be that much more rapid.

The pace of quoting on an export order i.e. maximum period in which to confirm an offer is likely to further and rapidly decrease. Among factors: growth of Internet-based, business-to- business ( b2b) E-Commerce; EDI (Electronic Document Interchange ) involving established customers, product sources and financing and logistics intermediaries; and dissemination of mobile telephone technology capable of accessing the Internet on a wireless basis (WAP).