—Subsidised loans upto Rs5 million to be provided to youth under programme
The federal cabinet is likely to approve Rs200 billion worth Prime Minister’s Kamyab Jawan Program (PMKJ) in its Tuesday’s meeting to enable unemployed youth to avail affordable financing for starting up new business or strengthening their existing business, it was learnt reliably.
Sources told Pakistan Today that finance division has prepared a summary which will be presented in federal cabinet’s meeting to be held under the chairmanship of Prime Minister Imran Khan.
The cabinet may grant its nod to the premier’s vision for employment of youth, said sources.
Documents available with Pakistan Today also disclose that under this programme, three tiers of subsidized loans will be disbursed. Tier 1 will be up to Rs0.5 million, tier 2 will range from Rs0.5 million to Rs10 million and tier 3 from Rs10 million to Rs25 million.
With regard to security requirements, tier one loan is proposed as clean lending with only personal guarantee of the borrower himself while for tier two and tier three loans, banks may follow their own credit policy.
According to the documents, the programme will enable unemployed youth in the age bracket of 21-45 years to avail affordable financing for starting up new business or strengthening their existing business.
“This program will provide self-employment opportunities to estimated 138,000 young borrowers with cumulative financing of approximately Rs200 billion in five years, thereby creating around one million employment opportunities in Pakistan,” said the document.
Prime Minister’s Kamyab Jawan Programme will facilitate to meet the government’s target of creating two million jobs through SME sector under enhanced National Financing Inclusion Strategy.
It is estimated that around Rs600 million in first year, and Rs3.8 billion in second year are required to be allocated by the government of Pakistan for providing markup subsidy and credit loss subsidy after launch of the programme. Similarly, on a cumulative basis, Rs24 billion subsidy may be required for this programme in next phase.
Moreover, Special Assistant to the Prime Minister on Youth Affairs has informed finance division that he held meetings with State Bank of Pakistan (SBP), National Bank of Pakistan (NBP), Bank of Punjab (BoP), and Bank of Khyber (BoK). Similarly, this programme was finally discussed in a meeting held under the chairmanship of finance minister on February 12, 2019.
SBP has informed the finance division that on the directions of Prime Minister’s Office, they have developed a scheme for promotion of SME lending within the parameters of National Financial Inclusion Strategy.