SAARC Development Fund (SDF), the umbrella financing institution for SAARC member states, is in the process of conceiving an e-commerce platform to enable seamless trade of goods and services across SAARC member states, reports the Businessline.
“A proposal to develop a cross-border e-commerce platform, along with a SAARC money card for the common people across the region, is under finalisation,” said the chief executive officer, SDF, Sunil Motiwal. The plastic SAARC money card can have denominations of all the currencies of its member states, he added.
Given that only 4% of the total trade of SAARC member states takes place within the region, Motiwal pointed out that e-commerce offers a great opportunity to significantly increase intra-SAARC trade and services. For instance, consumers of Bangladesh textile – located anywhere in the SAARC region – can place orders on the e-commerce platform. Likewise, a range of commodities, including fruits and vegetables grown in Bhutan, Pakistan and India, can be sold and bought online, which will help the producers and consumers, he said.
In regards to regulatory issues of e-commerce, Motiwal said, “We will connect with regulators and central banks of all Saarc member-countries and emphasise the underlying potential of online trading.” The plan is somewhat akin to the European Union’s ambitious single digital market idea which covered everything from e-commerce to broadband spectrum, courier and parcel delivery rates, and uniform telecoms and copyright rules across 28 countries.
To become a full-fledged Development Bank
The announcement comes on the heels of the recently concluded SAARC Development Fund Partnership Conclave held in New Delhi. Addressing the event, Motiwal explained that the SDF is working on a roadmap to strengthen its credit portfolio and tap the financial market before converting itself into a full-fledged SAARC Development Bank, the Business line said in a different report.
“Our strategy is to convert the SDF into a regional bank in the near future. Right now, the focus is to strengthen our credit portfolio; once we have a lender’s status, then we can raise funds from the capital market through various instruments such as bonds,” he said.
With an authorised capital of $1.5 billion and a total capital base of $500 million, the SDF is working to enhance its credit portfolio to $300 million in the next few years by financing a range of projects, including renewable sources, transportation, telecom and environment in the SAARC region, said Motiwal.
The Thimpu-headquartered SDF was established in 2010 by heads of eight SAARC member states — Bangladesh, India, Sri Lanka, Pakistan, Afghanistan, the Maldives, Nepal and Bhutan.