Punjab approves scheme to fund start-ups

Young entrepreneurs feel mark-up rates will be the key for those who already have access to bank loans


​ Our Correspondent April 04, 2020
PHOTO: FILE

LAHORE: The Punjab Provincial Development Working Party has approved Rs9.5 billion worth funds, which the officials said will be distributed preferably to young entrepreneurs under the 'Punjab Rozgar Scheme'.

The move has been made in a bid to reduce the ongoing wave of unemployment and to drive economic stability through facilitating small entrepreneurs and start-ups along with existing business in Punjab as financial support due to the coronavirus pandemic.

According to the press release issued by Punjab Planning and Development Department on Friday, the current emphasis of Punjab government is to enable young entrepreneurs to establish and flourish their businesses in the backdrop of soaring unemployment and financial challenges.

It stated that Punjab government considers it a paramount duty to steer the educated youth of the province in the right direction. The primary agenda of the aforesaid is to deal with ongoing crisis and to create opportunities for youth that can lead them towards employment generation and economic development of the province.

"The loan will be given by Bank of Punjab, previously banks were hesitant to give loan to young entrepreneurs, but the government will share the risk and will give them mark-ups from its account," P&D Punjab chairman Hamid Yaqoob Khan told The Express Tribune.

As per the details, along with males and females, transgender will be equally eligible for the loan, preferably a sole proprietor or partnership with the managing partner but should meet the education, skill and age criteria. In response to existing financial instability triggered by the COVID-19, the maximum limit will be Rs50 million.

Several economists feared that transparency will be the biggest issue for this scheme to get desired results; they voiced that previously all such schemes were politically driven. They feared that the desired results may not be availed from such a scheme if it is meant to create job opportunities or poverty alleviation.

Some young entrepreneurs feel that mark-up rates will be the key for those who already have access to bank loans. "Low-interest rates for this scheme will be the key point at least for those businessmen who are already working in this intense market for some time," a young entrepreneur from Lahore Ramiz Ahmed told The Express Tribune

"If I have access to bank loans then why should I go for this scheme with so many requirements," he asked. If there will be some division in terms of mark-up rates only then it will help, else this scheme will end up like previous schemes, he added.

Published in The Express Tribune, April 4th, 2020.

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