KARACHI, Oct 5: Not a single loan application has been approved in the last one month of the launching of much-trumpeted “President’s Rozgar Scheme of National Bank of Pakistan” on September 6 by Gen Musharraf.

The president promised that the scheme would reach 2.5 million jobless young men and women with Rs100 billion loans in next five years to help them set up their small businesses of public transport, grocery and communication centres. The National Bank is implementing the scheme after converting it into a “Karobar Scheme” that demands from the jobless young men a minimum qualification of matriculation, a driving licence, a franchise from the Utility Stores Corporation and a safety cover of two guarantors to offer them loan up to Rs2 in form of a rickshaw or grocery items.

After a purchase of more than 100,000 loan application forms at Rs5 each by the jobless persons from various branches of the National Bank, the International Credit Information Limited (ICIL), a well-reputed private consultancy, reports delivery of 30 forms processed by the teams of National Bank.

The ICIL has been hired by National Bank to physically verify the credentials of the loan applicants and also to report on status of the two guarantors. Under the procedure, the loan applications are first processed by a team of three bank officials at any of 143 designated branches to find out if all the requirements are met.

It means that an applicant has to give matriculation certificate, a driving licence if wants to get a CNG-run rickshaw or a franchise from the local Utility Store to open a grocery business and name of two guarantors plus the authentication of the local councillor. And if the three-banker team find the loan application in order, it is despatched to the nearest office of the ICIL to physically verify the credentials of the applicant and social status of the guarantors.

“So far not a single loan application has been forwarded from Karachi, Lahore or Islamabad,” sources involved in the loan application processing and verification said. Most of the loan applications have come from Gujrat, Sargodha and small towns of Punjab.

“This is not a yellow cab scheme,” a senior executive of National Bank responded when reminded of the initial commitment of disposing of the loan applications in three days in the branch and 10 days to say yes or no to the applicant. As he said there was no question of saying ‘yes’ or ‘no’ to applications which were not in order and have been returned back to the loan aspirants. Yellow cab scheme was sponsored by Nawaz Sharif from 1991 to 1993 and was massively abused by the auto dealers who literally dumped cars of all makes and models worth about $1 billion as these were imported duty-free and were offered on 10 per cent down payment. About 1,000 such duty free imported cars were grabbed by the officers of armed forces and civil service when this scheme was terminated.

Benazir Bhutto’s self-employment generation scheme too was abused by the political workers. In short none of the two schemes helped in solving unemployment problem but added to the bad loan portfolio of banks then under government control.

Learning lessons from these experiences and the sword of National Accountability Bureau (NAB) hanging over their head, the NBP executives have so many safety valves enclosed in the Rozgar scheme that it has given a free hand to traffic police establishment, the local politician who is a councillor and the petty official in the area Utility Store to exercise his authority on an unemployed person.

The Utility Stores, according to market sources, are grappling with stocks problem and find it difficult if not impossible to maintain a steady supply line of grocery items that are much in demand for the beneficiaries of Rozgar scheme.

Deprived of loan sanctioning powers, the NBP officers at the branch level do not find much temptation in the new job which demands an examination and scrutiny of the loan applications unless these come from some one who is related to them.

But under the procedure, the approval of the loan application depends on the verification report of the ICIL that is being paid Rs500 for processing every loan application.

With offices in 10 big and small cities of the country that are connected online with each other and also in contact with the NBP, the ICIL is responsible to put final words on credentials of the applicant.

Market analysts consider the scheme a “non starter” as the NBP is too “bureaucratic heavy” that targets elite clients for disbursement of consumer and personal loans. “The NBP can write off a huge amount runs in billions against borrowers from trade and industry but will take all safeguards when advancing only Rs200,000, that too, not in cash but in kind to an educated unemployed,” a young unemployed engineering graduate remarked.Launched at a time when next general elections are around the corner sometimes in 2007 or early 2008, the government’s intentions, according to the political analysts was to reach in first year to about 40,000 borrowers with about Rs8 to Rs10 billion loans.

“The idea was create a small class of stakeholders in the low income group people in all parts of the country who would be an active and vocal support base of Gen Musharraf,” a political analyst said who is now convinced that this half baked “Rozgar-cum-Karobar Scheme” is bound to prove counterproductive.