THE launch of the Prime Minister’s Youth Business Loan Scheme has generated excitement. In the first phase, the government plans to disburse Rs100bn among 100,000 loan-seekers who will be able to apply for a sum of between Rs100,000 to Rs2m. The ceiling indicates that in its attempt to ensure greater economic activity the scheme seeks to ensure that its impact is expansive. The smaller loans may also be ideal in the context of recovery, which is always a tricky proposition. Transparency and easy accessibility are essential to the success of such a programme. Another crucial factor is the creation of a favourable environment for loan utilisation. Without the provision of the right conditions for utilisation, the loan-granting authority and its intended beneficiaries could end up blaming each other. The repercussions of such failure can be dangerous for the two parties and for the banks.

The government understands the worth of the youth loan project. This, among other things, is borne out by the appointment of the prime minister’s daughter Maryam Nawaz to oversee the scheme. Something of a PML-N counterpart of Benazir Bhutto whose posters adorned the previous government’s income support programme, Ms Nawaz would not have been advised to risk the scheme unless there were real prospects of some work to do and some popularity points to earn. The issue of the chair settled, the government needs to ask itself whether it can quickly create an atmosphere suitable to the utilisation of the funds on offer — like improvement in the energy sector, etc. The idea is, or should be, to encourage small-scale industrial entrepreneurship. That cannot happen without infrastructural support. What often happens is that the loans end up being used to set up shops with little or no addition to industrial production.