Prime Minister Nawaz Sharif addressing the launching ceremony of Youth Business Loan Scheme in Islamabad on Saturday. PHOTO: PID
The Youth Business Loan programme, which is part of the larger 'Prime Minister's Youth Programme' initiative, is designed to provide subsidised financing at 8% mark-up per annum for 100, 000 beneficiaries through the National Bank of Pakistan and First Women Bank.
Speaking on the occasion, Nawaz Sharif said that excessive nationalisation by previous governments had devastated industry and economy in Pakistan.
"It is not the government's task to be running businesses. That's for the people to do," Nawaz said to applause from the audience. "The government's responsibility, rather, lies in delivering the quality of security and law and order as is required by the people."
Nawaz said that everything from banks to mills and even the tiniest industries were nationalised in Pakistan, which hindered the country from running an economy on small enterprises, which other countries like Korea succeeded in.
"I was surprised to see that in countries like Korea, these small enterprises form the very crux, the driving force behind the economy."
The PM went on to say that when he was first elected prime minister in 1990, the government privatised many of these industries including banks like Muslim Commercial Bank, Habib Bank Limited and others.
"It's this privatisation that has borne fruit and made these companies, industries immensely profitable not just for themselves, but for the national exchequer account too."
Nawaz said that statistics indicated that a large percentage of the youth in this country was unemployed.
"A large number of hands shot up at every occasion I asked for a show of hands by those who were suffering from unemployment," he said.
"It was heartbreaking to see this number of people unemployed, and to know that no one in Pakistan cared about these people, many of whom were degree-holders too."
Nawaz went on to say while inaugurating the loans scheme that the programme had received accolades and encouragement from various foreign officials. He especially mentioned US President Barack Obama Senator John Kerry while describing the kind of support Pakistan was offered to make an economic recovery.
Speaking on the occasion‚ the PM's daughter and Chairperson of Prime Minister's Youth Business Loans Maryam Nawaz said the launch is fulfillment of one of Nawaz Sharif's prime election commitments.
"The Rs100 billion set aside for the programme will be disbursed among 100,000 talented and skilled youth in the next seven months," she said.
"The Prime Minister was deterred and discouraged by many people, who advised him against the idea of distributing funds to inexperienced youth. But he always said - and I'm witness to this - that we should trust our youth, that investment in youth is investment in the future of Pakistan."
Maryam Nawaz said there are only three conditions for the applicants - that they should be Pakistani‚ they should hold a valid Computerised National Identity Card and lastly, they should have a guarantor.
She said forms of the Youth Business Loans will be available from Monday and these would be issued free of cost.
Special counters have been set up at banks and SMEDA offices to facilitate applicants and guide them.
She also explained the procedure for the processing of applications and other details of the Youth Business Loans, clarifying that necessary checks have been put in place to ensure transparency of the loans.
The loans
The total mark up rate would be 15% but the government would pay the remaining seven percent on behalf of applicants.
Those falling in the age group of 21 and 45 years are eligible to apply for loans inside the range of Rs0.5 million to Rs2 million.
Small business loans with tenure up to seven years plus one year grace period and a debt-equity ratio of 90:10 will be disbursed across the country including four provinces‚ Gilgit-Baltistan‚ Azad Jammu and Kashmir and Federally Administered Tribal Areas.
Small and Medium Enterprise Development Authority has been tasked with an advisory role in the implementation of Prime Minister's scheme.
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Wonderful publicity campaign for the political party but I see little disbursements happening under the progamme due to difficulties in finding a guarantor. Seriously, if I need to reach out to a guarantor, I dont need a PM Scheme, I can get the loan myself.
Had the Government allocated the 100BLN into a YOUTH Venture Capital Fund and participated as an equity partner, then a creditor, there would be better enterpreneur development. banks will have no incentive to build and guide the young enterpreneurs given that they are lending on the strength of the guarantor, from whom they will collect is things turn sour and the loan goes bad.
Though, this step is taken with good intention, but if there isn't any Business opportunity provided in the country for entrepreneurs n toddlers, how would they b able to invest their borrowed wealth properly...?? Wouldn't it be more better step to provide students some expert-ideas with that proposed loan, so that they could not feel themselves on risk in availing that decilition...
Old businesses of the people are already at stake although people doing businesses are experienced. How young people who have no experience of runnung any business will succeed. Industies in the country are closed for 5 days a week due to nonsypply of gas and gas is provided only for 2 days in a week. How the country's economy can improve is unknown? Rs.100 billion allocated for businesses by youth are going to be wasted and the banks which will provide these loans are bound to suffer as was done previously when Habib Bank Ltd. suffered heay losses when Nawaz Sharif introduced taxi scheme. The fate of this scheme will not be different from the fate of taxi scheme. The scheme has been launched to divert the attention of the youth from the burning problems of unemployment and rising prices in the country and also as a political bribery to win local body elections next month as was done by distributing lap-tops to students worth billions of rupees which were distributed before general elections. This scheme is nothing except robbery of national exchequer and is bound to fail. Mariam Nawaz, the daughter of P.M. who has been made Incharge of this scheme. has no experience of banking and is totally inexperienced.
I wish one day our policymakers will believe in Islam...
I don't know why our rulers are reluctant to build partnerships with people of Pakistan..!
8% markup...! "markup" is a heartbreaking term for many people like me :(
You can get well over 8% per year (with of course principle back), if you make partnerships with each individual business. There are lots of ways to do "business-things" without crossing or violating Islamic norms...
I am disappointed, but haven't lost hope...
its all are rubbish fist the p.m should back the money which are in foreign banks and he should paid the tax properly then we'll except his pakage
"'Heartbreaking to see the spread of unemployment': PM launches youth loan scheme"
Reminds me of Nero's tears.
The last time Mian Ji's heart was breaking he cost the national banks and the government billions courtesy the yellow cab scheme..Aaaargh
@optimist: That is what you think ! none of them will be able to return the amount....has beneficiary of yellow cab return money or cab ? there is nothing positive about this scheme....this will only increase inflation and subsequent rise of daily ítem....why guys do not analyse actions moré critically from económic point,of view. This amount could best be used in increasing the existing capacity of power utilities in conversion from thermal to coal, for example, which in turn would startup the dead factories and industries, in turn increase employment....in absense of this step, young people are turning into criminals and extortionists etc;
Where are business plans for these loans ? electricity ? Another failed idea from accountant turned finance minister ....
It is indeed a good step. Even if 10% of these people are successful, they will return a lot more in taxes and new jobs to the state! . I don't know why some people are so negative even about a positive news.
This amount should have Been best used to generate electricity through coalición, solar etc'....this would have made idle factories and industries up and running and youth would be absorbed in them....that was the best solution. This Rs 100 billón will end up like yellow cab schemep.......
And PM Sb pls do not blame ZAB....it was early 70s period after that you had 2 times govt and now you are in 3 rd time.....do not unnecessarily put your own failures on someone else shoulder......please.
Rather than give them loans why not give them a job? Don't you have streets, sewers, or schools that need building or repair?
The guy who wrote the comment with Alias "Youth" really needs to work on his maths 100 billion is written as 100,000,000,000 divided by 100,000 = 10,00000
Is this loan for only Panjab ... ? Application will accept from Waziristan (NW) people ?
lots of youth will get employment when factories from KSA & Bangladesh will be shifted to Pakistan......
@Youth: You know math but not English. This scheme is for 100 billion rupees. 1 billion = 100 crore. You were confusing a billion with a crore. Now do the math again.
will be a total loss. This is a place where students never even return "karz-e-husna", rich default bank loans and now this.
We strongly condemn this Youth Business Program and selection of Maryam Nawaz as Chairperson for this program.
Nawaz Sharif must learn from his past mistakes but he has not learned anything. Ishaq Dar is also his relative.
This scheme will also failure and will not produce any positive result in the economy of Pakistan and can combat high rates of unemployment in youths.
Just a political gimmick ! as long as the security situation does not improve, economic situation will not get any better. So in a few years, there would be more unemployed but in debt youth whose business could not work.
'Heartbreaking to see the spread of unemployment': PM launches youth loan scheme " +++++++++++++++++++++++++++++++++++++++++++++ Very strange heart...it does not break to see tomato selling at rs 150 a kg.
No mention has been made of the guarantees required to in case of a loan default. No mention has been made of the mechanism for disbursing the loan. These are important details which ET could investigate and inform its readers. It must be realized that recovery of default loans is practically impossible given the back log in our courts. The PM has announced a scheme on humanitarian grounds - not business requirements. I am afraid the money will be wasted.
Before election slogan was "Bila Soud" now 8% - another josh khitabat
plz guyz dont hesitate people.... it will b a huge turnover for the future of those who could nt made effort.... its a right step at right time....feel the feelings of needy....thnk plz
Minimum age limit should be brought down to 12 years, so that majority of PTI also qualifies for these loans.
@Jibran: J, since you were initially contesting elctions against PNL-N, so no chances for you to qualify in this life for any project during N-League goverment! sorry mate.
If a person gets a loan of 2 million than after first year he or she is suppose to pay 31000 to 32000 Rs per month, i wonder if the person is at loss than how he or she will pay back 2.8 million Rs (0.8 million Rs markup). I think government should also focus on guiding youth to use the loan wisely and SMEDA may be made more effective in this regard.
I'd rather appreciate reforms for tax collection with this amount-honestly dude, what on earth are you upto? You're simply passing on loans forward-finding the easiest possible way of pumping in money-why on earth don't you spend this amount on health and education? We are for heavens sake first, overpopulated and-to make things worse-were uneducated. It's like a cracker in the hands of a monkey! When will you understand the word 'governance'?
....and where will you get the money from ?.....print it ?
@Akhtarrao:
I'm not misguiding the youth. I am looking out for their best interests. The country is in shatters and they have a right to live their lives to the fullest extent.
Mark up is interest! and we know very well what interest is??? going against Allah and hoping for betterment...comparitively the Benazir income support program was better as there wasnt any interest involved!