Shehbaz Sharif more than triples the borrowing ceiling, lowers the eligibility age and reserves 30% of loans for women, but leaves crucial financing terms unanswered.
ISLAMABAD, Nov. 9 (Focus Pakistan) - The PM Youth Loan Scheme now lets an 18-year-old with a business plan walk into a bank and ask for Rs25 million. Until the change, nobody could get more than Rs7.5 million, and most applicants had to turn 21 first.
Prime Minister Shehbaz Sharif signed off on the jump, which more than triples the old cap under the Prime Minister’s Youth Business and Agriculture Loan Scheme (PMYB&ALS). The new top figure is Rs2.5 crore, and the age bar comes down to 18. Women now get a bigger share, too: the prime minister directed that 30 percent of all loans go to them, up from the 25 percent quota the scheme carried at launch.
The age cut matters most for small-town entrepreneurs and young farmers. Until now, onlyIT and e-commerce ventures could borrow at 18. Everyone else had to wait until 21. Not any more.
What about the top age of 45? On that, the announcement stays silent.
A familiar number
Rs25 million has appeared before. In 2020, the Kamyab Jawan programme of the previous government offered youth loans up to that amount in its top tier. When the current government relaunched the scheme under its present name in December 2022, the cap dropped to Rs7.5 million. The new ceiling brings back the old top end.
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State Bank of Pakistan (SBP) figures give a sense of scale. From January 2023 to the end of June this year, banks handed out 555,791 loans under PMYB&ALS. Their combined value came to Rs287.6 billion.
Agriculture got more than business did, with 343,709 loans and Rs151.6 billion. Businesses received 212,082 loans totalling Rs136.1 billion.
Repayment has held up. Bad loans? Just Rs2.55 billion by end-June. That’s under 1 percent of everything lent.
Small loans dominate the headcount. Interest-free Tier-I loans of up to Rs500,000 account for 471,371 cases, about 85 percent of the total. The money tells a different story. Tier-III loans, between Rs1.5 million and Rs7.5 million, make up Rs197.1 billion, more than two-thirds of the value.
The bill behind bigger cheques
Right now a Tier-I borrower pays zero. Tier-II costs 5 percent, Tier-III 7. The banks want more than that: six-month KIBOR, the Karachi Interbank Offered Rate, plus three points. The government covers the gap.
With six-month KIBOR near 11.8 percent at end-June, that gap works out to roughly eight percentage points on a Tier-III loan. Every extra rupee lent at the top end adds to the state’s subsidy bill.
The prime minister’s announcement does not spell out the markup on loans above Rs7.5 million. It also leaves open when banks will start processing the larger amounts.
Everything begins at pmyp.gov.pk, the Prime Minister’s Youth Programme portal. Bring a valid CNIC. After that, the bank looks over your business plan and settles on how much to lend.
Half a million loans in, the scheme now bets bigger, and younger.
