Prime Minister Shehbaz Sharif said on Tuesday that Pakistan wants to complete the 9th review of the International Monetary Fund (IMF) programme “without any delay.”
Speaking at the launch ceremony of the ‘Prime Minister’s Youth Business and Agricultural Loan Scheme’, he said that “we have told the IMF that we are willing to complete the pending review and incorporate the conditions raised by it”.
His statement came as the government of Pakistan and IMF remain at odds over the next installment of the programme and as the nation’s foreign exchange reserves have critically declined.
In the meantime, the PM provided more details on the loan programme, stating that it would allow young people to obtain loans up to Rs. 7.5 million at a reduced interest rate for up to eight years.
“Borrowing of up to Rs500,000 will be free of interest and it can be paid back in three years,” he said. “People who take loans of Rs500,000 to Rs1.5 million will be charged 5% interest and they can pay it back in 7 years.”
He added that people borrowing Rs1.5 million to Rs7.5 million will pay 7% interest and the payback period is 8 years.
SBP fixes Rs30 billion target for PM’s Youth Loan Scheme
Jameel Ahmad, governor of the State Bank of Pakistan (SBP), spoke at the event and stated that the prime minister’s youth business and agricultural loan scheme has a target financing amount of Rs30 billion from the central bank, which will be provided to commercial banks and microfinance organisations.
According to him, 14,600 loan applications totaling Rs17 billion have been submitted under the programme thus far.
“SBP has given banks the facilities of mark-up subsidy and credit risk sharing for this scheme,” he said. “Under the initiative, the public can apply for interest-free loans of up to Rs500,000 without any collateral.”
According to the SBP governor, 15 banks and 5 microfinance banks and institutions are executors of the programme.
Boosting agriculture sector credit is among top priorities of the State Bank of Pakistan and the government, the central bank governor said.
“The SBP played a huge part in designing this programme and it is aimed at giving loans to youth in a transparent and easy manner,” he said.