The administration declared on Monday that the prime minister’s interest-free and subsidized loan programme for young entrepreneurs will be resuming. “Youth Business and Agriculture Loan Scheme” is the new name for the programme under the coalition government of the Pakistan Muslim League-Nawaz.
The updated plan has added two additional sources of funding, namely microloans and loans for agriculture. The programme offers financing in three segments of up to Rs. 7.5 million each at subsidized interest rates ranging from 0% to 7% for a maximum of nine years. The application form will clearly mention the processing duration, which will not be longer than 45 days. Women will be eligible for 25% of the loans.
Individual Pakistani residents with entrepreneurial potential who are between the ages of 21 and 45 and possess a Computerized National Identity Card (CNIC) are eligible to apply.
The minimum age requirement for IT/e-commerce-related business applicants will be 18 years old, and matriculation or an equivalent educational certificate will be required. Businesses with partnerships only require one owner, partner, or director who falls within the given age range. Young people-owned small and medium-sized enterprises (SMEs) that are both starting up and operating are also eligible.
Three tiers have been established for the loan. Eligible borrowers may get up to Rs. 500,000 at no interest under Tier 1 (T1). Borrowers may get up to Rs1.5 million under tier 2 (T2) at a 5% subsidized interest rate. Under tier 3, they are permitted to borrow up to Rs7.5 million at a 7% subsidized interest rate (T3).
T1 and T2 borrowers are required to contribute 10% of the project’s total cost in cash (or immovable property of equal value). For borrowers who fall under T3, the equity-to-debt ratio would be 20% to 80%, respectively.
