The Youth Business and Agricultural Loan Schemes were introduced by Prime Minister Shehbaz Sharif on Tuesday in Islamabad with the intention of encouraging youth entrepreneurship and self-employment.
The lending facility under the schemes is available to individuals between the ages of 21 and 45. The minimum age requirement for IT and e-commerce companies is 18 years old.
The loan “schemes are aimed at making the youth self-reliant,” added Premier Shehbaz.
Eligibility Criteria
- All citizens of Pakistan holding CNIC, aged between 21 and 45 years with entrepreneurial potential are eligible (For IT/E-Commerce related businesses, the lower age limit will be 18 years)
- Small and Medium enterprises (startups and existing businesses), as per the definition of SBP, owned by youth as per the above-mentioned age brackets are eligible.
- For IT/E-Commerce-related businesses, a minimum education level of matriculation or equivalent will be required.
The detailed instructions for applying for loans are as follows:
Click on the link or type in the browser https://pmyp.gov.pk/bankform/NewApplicantForm
This screen will be appear
Read the instruction by clicking on User Manual English
Features
The scheme is available in three tiers with the following main features:
| TIERS | AMOUNT (PKR) | PRICING | MINIMUM EQUITY REQUIREMENT (FOR STARTUPS ONLY) | SECURITY |
|---|---|---|---|---|
| Tier-1 | 100,000 to 1,000,000 | 3% | 10% | Personal Guarantee |
| Tier-2 | 1,000,001 to 10,000,000 | 4% | 20% | Collateral as per the bank’s credit policy |
| Tier-3 | 10,000,001 to 25,000,000 | 5% | 20% | Collateral as per the bank’s credit policy |
*Pricing may change as per State Bank of Pakistan directives
Tenor of loan and payment
- Up to 8 years with a maximum grace period of up to one year
- The loan will be repaid in equal monthly/quarterly installments
The addition of agricultural loans will assist rural youth in bringing innovation to farming, including mechanized farming, the development of agricultural value chains, and the solarization of farming equipment to create more sustainable energy resource management in a country like Pakistan with a challenging climate.
- Small company loans for microfinance would encourage the norm of job creation rather than job seeking among the nation’s youth bulge.
- On the loan program, you can also use Islamic banking services.
- There is a 25% quota set out for women.
- The prime minister further stated that under the programs, loans up to Rs. 1.5 million can be obtained with the borrower’s personal guarantee.
“There will be no interest rate on the loan of up to Rs0.5 million. 5% interest will be charged on the loan of over Rs0.5 million to 1.5 million,” he said, adding, “7% interest rate will be charged on the loan of over Rs1.5 million to Rs7.5 million.”
Jameel Ahmad, the governor of the State Bank of Pakistan (SBP), remarked that “special instructions had been issued to the banks for giving loans to the youth” during his speech at the event.
The government and the central bank’s primary objective is to provide loans to the agriculture sector, he continued. The governor of SBP stated that farmers in flood-affected areas would receive the necessary help. “The maximum amount of loans for agriculture has been raised by 44%.”
He urged all institutions to play a positive role in connection with the youth loan scheme.
