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Govt allocates Rs1.6trln for soft loans to farmers, entrepreneurs

Govt allocates Rs1.6trln for soft loans to farmers, entrepreneurs

ISLAMABAD: The government has allocated Rs1.6 trillion in next three years to provide easy and concessionary loans to financially assist farmers and small businesses, the finance minister said on Saturday.

Minister for Finance and Revenue Shaukat Tarin said an extensive consultative process is followed in working out modalities of the Kamyab Pakistan program ensuring that all relevant stakeholders are on board. The finance minister commended all concerned who made great efforts in designing the whole program and taking it forward towards its formal launch which is scheduled soon.

Kamyab Pakistan program is a flagship program which will extend micro-loans to entrepreneurs, small business and farmers at 0 percent markup without collateral. The key focus is to provide loans to 4.5 million households at the lowest strata, registered with the National Socio Economic Registry of Ehsaas Program.

The cumulative disbursement under the program would be Rs1.6 trillion over the period of next 3 to 5 years and will benefit 3,000,000 families which makes this program as one of the largest of its kind in the world whereby the micro-loans will be disbursed under a wholesale arrangement between banks and the microfinance banks and Institution/housing finance companies.

Under the Kamyab Kissan program, agricultural loans shall be given to farmers with landholdings up to 12.5 acres. Micro loans would be extended up to Rs150,000 (per crop) for procurement of agricultural inputs to boost agricultural productivity. In addition, loans up to Rs200,000 would be given for machinery and equipment.

Similarly, loans will be extended for small businesses and start-ups at 0% markup in both rural and urban areas under ‘Kamyab Karobar’. Loan size is up to Rs500,000 and repayment will be in easy installments.

The third component of the scheme is introduction of a new tier titled Naya Pakistan Low Cost Housing Scheme wherein loans of up to Rs2.7 million (for government-backed) and Rs2 million for non-government projects will be given at highly subsidised rates for up to 20 years.

The program will also integrate with the government's ongoing skill development program for educational and vocational training under the “Kamyab Hunarmand” scheme and provincial initiative of Sehat Insaf Card.

The Kamyab Pakistan program has been designed to foster a bottom-up approach as envisaged by the Prime Minister. The KPP aims at empowering all those who are under-privileged and belong to marginalized sections of the society. ECC has approved the Kamyab Pakistan Program in its meeting held on 16 July 2021.