Govt plans soft loans scheme for jobless youth

The government has chalked out a comprehensive plan to provide soft loans to unemployed youth to start up their own business from a verity of 500 different kinds of targeted trades.

Brief Description

The name of the scheme will be "Prime Minister's Youth Business Loans" and it will focus on (but will not be restricted to) unemployed youth, especially educated youth looking for establishing or extending business enterprises.

Eligibility Criteria

CNIC holder;
Age 21-45;
Entrepreneurial potential;
Applicant may apply for loans under this scheme only from the designated branch mapped with his/her area of residence/business

Security Requirements

One/Up to 03 Guarantor/s having cumulative income equal to 1.5 of the amount applied for under the scheme Personal/Blood relations can also give guarantee for a borrower.
A government servant of BPS-16 and above can also act as a guarantee.

Focus on Women

50% quota of women borrowers.

Debt-Equity Ratio

90:10 with tenor of up to 8 years (including 1 year grace period).  The borrower’s contribution of equity would be either in the form of cash or immoveable property, and will be required only after approval of the loan.

Permissible collaterals (business hypothecation)

Pricing

6% fixed for borrower but government will pay the difference of the cost at KIBOR+500 bps.

Sectoral Distribution of Loans

For the time being, there will be no limit on the maximum number of loans for any sector. Placement of ceilings can be considered subsequently keeping in view the importance of sectors and applications received for various sectors. 

Size of Loan

Up to Rs. 20 lacs

Geographical Distribution

Whole of Pakistan
In the case of Balochistan, at least one branch of NBP will be designated per division
All non-designated NBP branches will guide the borrowers to the nearest designated branch along with facilitation to receive and dispatch the application to the nearest designated branch if so requested by the borrower.

SBP to ensure that loans are broadly in conformity with provincial populations.

Form processing Fee

Non-refundable form processing fee would be Rs.100/- at the time of submission of form. However, no fee will be charged for the form itself and a photocopy will also be admissible.

Application Form

Will require minimum essential information and the format will be as simple as possible to facilitate applicants

Training

SBP will arrange appropriate training for private banks to implement the scheme. NBP and FWBL will provide appropriate training to their own staff. NBP will also assist in training of FWBL and SMEDA Staff

Executing Banks

• National Bank of Pakistan(Branches)
• Frst Women Bank Limited(Branches)
• Habib Bank Limited(Branches)
• Habib Metropolitan Bank(Branches)
• Bank Al-Habib(Branches)
• Sindh Bank(Branches)
• Summit Bank(Branches)
• Al Baraka Bank(Branches)
• Dubai Islamic Bank(Branches)
• Allied bank Limited(Branches)
• Muslim Commercial Bank(Branches)
• JS Bank(Branches)
• United Bank Limited(Branches)
• Askari Bank(Branches)
• Soneri Bank
• Meezan Bank

Sectors and Products

All sectors. Standardized schemes/projects/ undertakings will be designed by SMEDA, projects designed by private sector service providers or by individuals themselves.
Role of SMEDA:
The 50 or so feasibilities prepared and uploaded by SMEDA would be extensively publicized and their access to public made easier through multiple linkages with other relevant websites;
SMEDA will work closely with Punjab Information Technology Board (PITB) to ensure that the schemes are accessible to those who participated in the PITB survey;

Important Stats

Banks	Applications Received	Applications sanctioned		Disbursement
		No.	Amount	No.	Amount
ABL	12	6	5.60	6	5.60
Askari Bank	22	6	5	6	5
Albaraka	62.00	43.00	36.36	40.00	30.74
Bank Alfalah	24.00	-	-	-	-
Bank Al Habib	54.00	22.00	37.48	22.00	37.48
Dubai Islamic Bank	2.00	2.00	3.70	-	-
Faysal Bank	-	-	-	-	-
FWBL	569	208	237.87	165	184.01
HBL	35	11	15.40	6	7.75
HABIBMETRO Bank	2	-	-	-	-
JS Bank	44	8	14.10	8	14.10
MCB	-	-	-	-	-
Meezan Bank	509	226	156.77	211	156.94
Sindh Bank	42	26	42.97	25	39.61
Soneri Bank	3	-	-	-	-
Summit Bank	268	205	200.13	187	180.15
UBL	234	47	57.08	33	41.20
Total	1,882	810	812.62	709	702.74