Prime Minister's Youth Business & Agriculture Loan Scheme 2023 -Pakistan

The Prime Minister's Youth Business & Agriculture Loan Scheme 2023 (Pakistan) aims to provide affordable financing options to aspiring young entrepreneurs and farmers.




Eligibility Criteria

To be eligible for the loan scheme, applicants must:

Age Limit

  • Be between 21 and 45 years old for regular businesses.

  • Be between 18 and 45 years old for IT/e-commerce businesses.

  • In case of companies and partnerships, only one partner/director needs to be within the age limit.

Educational Qualification

  • Have at least a matriculation degree or equivalent for IT/e-commerce businesses.

Nature of Business

  • Own a startup or existing Small and Medium Enterprise (SME).

  • Be engaged in the agriculture sector as per State Bank's criteria.

Citizenship

  • Hold a valid CNIC (Computerized National Identity Card).

Loan Size and Limits

The loan amount is divided into 3 tiers:

Tier 1

  • Up to PKR 0.5 million.

Tier 2

  • Above PKR 0.5 million and up to PKR 1.5 million.

Tier 3

  • Above PKR 1.5 million and up to PKR 7.5 million.

  • Maximum of 2 loans per borrower within the overall limit of PKR 7.5 million.

Type of Financing

Includes:

  • Term loans
  • Working capital loans
  • Murabaha financing
  • Leasing
  • Locally manufactured vehicles for commercial use (1 vehicle per borrower, except for food and distribution businesses)
  • Maximum 65% for civil works
  • Agriculture production and development loans

Loan Tenor

  • Tier 2 & 3 - Up to 8 years for long-term loans with 1 year grace period.
  • Working capital/production loans - Up to 5 years.

Debt-to-Equity Ratio

  • New businesses:

    • Tier 2 - 90:10
    • Tier 3 - 80:20
  • Equity in the form of cash or property to be injected after loan approval.

  • No equity required for existing businesses.

End-User Interest Rates

  • Tier 2 - 5%
  • Tier 3 - 7%

Collateral Requirements

  • Tier 2 - Clean loans (only personal guarantee)
  • Tier 3 - As per bank's policy
  • Financed vehicle(s) to serve as collateral

Sectors and Products

  • All sectors and products are eligible.
  • Agriculture includes crops, livestock, poultry, fisheries, dairy etc.

Online Application

  • Via PM Youth Program Portal in English and Urdu.
  • Direct applications to banks for processing.

Geographical Scope

  • Available across Pakistan.

Fees and Charges

  • Processing fee: PKR 100
  • Other charges: At actual

Conclusion

The loan scheme aims to promote entrepreneurship and agriculture by offering easy financing options to youth. The simple eligibility criteria, low interest rates and flexible collateral requirements make it an attractive proposition. Online applications add to the convenience. It remains to be seen how many young aspirants can benefit from this initiative.


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