KARACHI: The government on Monday while renaming and introducing some changes to the Kamyab Jawan Programme — launched during the PTI government in 2019 — added a couple of new features to the initiative aimed at facilitating the youth to set up or expand their businesses.

Categories of ‘agriculture’ and ‘microloans’ have been added to the ‘Prime Minister’s Kamyab Jawan Youth Entrepreneur Scheme (PMKJ-YES)’, which has been rechristened ‘Prime Minister’s Youth Business and Agriculture Loan Scheme (PMYB&ALS)’.

“The new components of interest-free microloans and agriculture loans have been added in the scheme,” said a circular issued by the State Bank.

Under the changes, the size of loans has been segregated in three tiers. Tier 1 offers up to Rs0.5m in loan, tier 2 offers Rs0.5m to Rs1.5m, while tier 3 offers loan from Rs1.5m to Rs7.5m.

Working capital up to Rs7.5m can be availed; women’s share in facility up by 5pc

The term ‘loans’ or ‘working capital loans’ include Murabaha and leasing or financing of machinery and locally manufactured vehicles for commercial use. Only one vehicle per borrower is allowed under the scheme.

However, a borrower in food franchise and distribution business may avail financing for more than one vehicle, said the central bank.

“Up to 65 per cent of total financing limit can be availed for civil works,” the SBP said, adding for “agriculture [sector], production and development loans are eligible [for loan]”.

End-user rates for T-1 will be zero per cent, for T-2 5pc, while 7pc will be for borrowers of T-3, it added. A customer can borrow twice — one will be a long-term loan and the other a short-term loan — within overall maximum financing limit of Rs7.5m. In case of agriculture, a customer may avail one production loan and one development loan within the overall maximum financing limit of Rs7.5m.

All sectors and products are eligible for loans. In case of agriculture, all crop and non-crop sectors (including crop production, livestock, poultry, fishery, dairy, etc.) are eligible for the loan.

All commercial and Islamic banks have been advised to come on board. Banks and DFIs are encouraged to participate as wholesale lenders for providing liquidity to MFBs/MFIs for onward lending under T-1.

The SBP said that 25pc of loans would go to women borrowers. Earlier, women’s share in such loans was 20pc.

Under the previous programme, 50pc of loans was offered by the National Bank of Pakistan, leaving the other 50pc for other banks.

According to rules, the loan processing time will not exceed 45 days. A non-refundable form processing fee of Rs100 will be charged, including the online verification fee of CNIC from Nadra.

Published in Dawn, December 13th, 2022