With his new financing scheme for the youth, Prime Minister Nawaz Sharif on Saturday unveiled a plan to enable budding entrepreneurs to run their business ventures.
The Youth Business Loans initiative is the government’s delivery of a promise made during the election campaign. “During the election campaign, I witnessed the vigour and enthusiasm that the youth showed, and promised that if voted to power, the PML-N would empower the youth of Pakistan so they can contribute effectively towards the development of the country,” he said at the launch of the scheme.
The chairperson of the prime minister’s Youth Business Loans scheme, Maryam Nawaz, said the aim was to convert young ‘dependents’ into ‘providers’.
She lauded efforts of the PML-N government to successfully launch six youth welfare programmes despite the financial crunch. Touching upon eligibility criteria for applicants, Maryam said three conditions must be met: an applicant must be a Pakistani, possess a valid computerised national identity card (CNIC) and must have a guarantor.
She also said that forms of the Youth Business Loans scheme would be available from Monday and would be issued free of charge at special counters set up at banks as well as Small and Medium Enterprises Development Authority (SMEDA) offices.
Maryam also explained the procedure for the processing of applications and other details of the programme and said that ‘necessary checks’ have been put in place to ensure the transparency of loans.
She added that 55 project pre-feasibilities have been prepared and are available on the SMEDA website. However, if the applicant has his/her own business plan, it will be acceptable for participation in the award process. The National Bank of Pakistan and the First Women’s Bank have been directed to ensure transparency and merit.
At the event, the prime minister assured transparency in the awarding process. He said that Rs100 billion has been allocated for the programme during the current financial year and that 100,000 unemployed young people will receive loans in the first phase through a ballot. “No one, not even myself, will have the authority to influence the loan award process,” said the premier.
Nawaz denounced the nationalisation policy of the founder of Pakistan Peoples Party and former prime minister ZA Bhutto. Bhutto’s move to nationalise the biggest institutions inflicted losses on the national economy.
The prime minister said his government was mulling over a decision to privatise Pakistan International Airlines (PIA) and other loss-making institutions. “Pakistan would have prospered if there was no nationalisation policy introduced by Zulfikar Ali Bhutto which caused damage to the state,” he said.
Details of the Youth Business Loans
The scheme is designed to provide subsidised financing at eight percent mark-up per annum for 100,000 beneficiaries through National Bank of Pakistan and First Women Bank.
The total mark up rate would be 15 per cent but the government would pay the remaining seven percent on behalf of the applicants.
Those falling in the age group of 21 and 45 years are eligible to apply for loans from Rs100,000 to Rs2,000,000.
Small business loans with a tenure of up to seven years plus one-year grace period and a debt-equity ratio of 90:10 will be disbursed across the country including Gilgit-Baltistan‚ Azad Jammu and Kashmir and the Federally Administered Tribal Areas.
Youth will have an eight-year payback period with the first year as a grace period for repayment.
Published in The Express Tribune, December 8th, 2013.