PM Imran Khan. PHOTO: PID/FILE
ISLAMABAD: The government of Pakistan Tehreek-e-Insaf (PTI) has decided to disburse Rs200 billion under the Prime Minister’s Kamyab Jawan programme among youth without charging any interest to achieve the target of providing 2 million jobs in small and medium enterprises (SMEs).
Under the programme, the government will provide a subsidy of Rs24 billion over a period of five years by not collecting interest on loans. After the launch of this programme, the Prime Minister’s Youth Business Loan Scheme, initiated by the previous administration of Pakistan Muslim League-Nawaz (PML-N), will cease to exist.
Sources said Prime Minister Imran Khan had formed a committee comprising the minister for communication, adviser to prime minister on finance and special assistant to prime minister on youth affairs to fine-tune the loan programme.
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Government officials also held meetings with officers of the State Bank of Pakistan, National Bank of Pakistan, The Bank of Punjab and the Bank of Khyber. Later, an effective programme for SME lending called the Prime Minister’s Kamyab Jawan scheme was developed.
The loan programme was also discussed in a meeting held under the chairmanship of then finance minister Asad Umar on February 12, 2019.
The management of the State Bank of Pakistan (SBP) said on the directives of the Prime Minister’s Office, they had developed a scheme for the promotion of SME lending within the parameters of National Financial Inclusion Strategy.
Under the scheme, three types of subsidised loans will be disbursed. Under tier-1, loans of up to Rs0.5 million will be provided, under tier-2 loans will range from Rs0.5 million to Rs10 million and under tier-3 loans will range from Rs10 million to Rs25 million.
In the tier-1, credit will be considered as clean lending with only personal guarantee of the borrower while in the tier-2 and tier-3, banks may follow their own credit policy.
The loan scheme will allow unemployed people in the age bracket of 21-45 years to apply for affordable financing for starting a new business or strengthening their existing business.
Prime Minister’s Kamyab Jawan loan programme will help to meet the government’s target of creating 2 million jobs through the SME sector as approved by the premier under the National Financial Inclusion Strategy.
It is estimated that around Rs600 million in the first year and Rs3.8 billion in the second year are required to be allocated by the government for providing mark-up subsidy and credit loss subsidy under the programme.
Published in The Express Tribune, May 8th, 2019.
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