Saudi Exim Bank and the International Islamic Trade Finance Corporation (ITFC) have extended a US$25mn trade finance credit line to a Pakistani lender.
Bank Al Habib will use the credit line to offer trade finance to Saudi SMEs that export non-oil products to Pakistan.
Saudi Exim began operations in 2020. One of its main aims is to reduce the kingdom’s long-standing reliance on the oil sector by stimulating other export industries.
The deal with Bank Al Habib will “broaden export horizons for Saudi SMEs, fostering increased participation and attracting new importers of Saudi goods in Pakistan”, a release from the ITFC says.
“This collaborative endeavour signifies a crucial step forward in fortifying international trade and elevating the contribution of SMEs to the gross domestic product, aligning with the objectives of the Kingdom’s Vision 2030,” the release says. In 2022, Saudi Exim and ITFC signed an agreement, alongside Monshaat, a Saudi authority dedicated to promoting SMEs, to build a framework for future trade finance facilities and capacity-building initiatives. Saudi Exim says around 40% of its portfolio is allocated to SMEs.
As the trade finance arm of the Islamic Development Bank, the ITFC provides direct lines of credit to member states in the Organisation of Islamic Co-operation, or indirectly through commercial banks—GT Review
