Government mulls removing age limit for entrepreneurs’ soft loans

ISLAMABAD: The government is considering to remove age limit for entrepreneurs to qualify for concessionary loans to promote entrepreneurship, officials said on Friday.

A meeting discussed removing the age limit for loan eligibility so that all segments of the society could benefit from the Kamyab Jawan programme.

Minister for Finance and Revenue Shaukat Tarin chaired a meeting to develop the institutional framework of funding for the Kamyab Jawan programme.

Tarin said he wanted the programme to be finalized in a manner so as to cover all the targeted beneficiaries.

He directed all concerned to prepare the final proposal so that budgetary allocations could be made accordingly.

Special assistants to the Prime Minister on youth affairs and finance and revenue and presidents of National Bank of Pakistan, Bank of Punjab and Habib Bank Limited attended the meeting.

The finance minister considered in detail the proposals prepared by the State Bank of Pakistan, Bank of Punjab and Akhuwat Foundation.

The proposals have been developed to facilitate the provision of subsidised loans for the agriculture, low cost housing and small businesses to generate employment and promote growth.

The role of micro-finance institutions, commercial banks and rural support programmes was discussed and highlighted as partner institutions to achieve the objectives of the programme.

So far, 10,000 youth have directly been benefitted from distribution of Rs8 billion, while a total of about 70,000 were provided employment with disbursement of youth entrepreneurship scheme (YES).

The YES was launched in October 2019 under the banner of Kamyab Jawan programme to provide the youth soft loans for initiation of their own businesses.

Recently, the government has enhanced the scope of YES which was meant to offer huge amount of concessionary loans ranging between Rs100,000 and Rs25 million to the youth.

Earlier, it was limited to Rs5 million only. According to the State Bank of Pakistan, under the YES, financing was segregated into three tiers. Under tier-1, loan limit is from Rs100,000 up to Rs1 million, whereas tier-2 loan limit is from above Rs1 million and up to Rs10 million and under tier-3, loan limit is from above Rs10 million and up to Rs25 million.

For tier-1 loans, mark up rate is 3 percent, while markup rate for tier-2 loans is 4 percent, and for tier-3, mark up rate is 5 percent.