Islamabad: In a significant development, the government has extended the Prime Minister’s Youth Business and Agriculture Loan Scheme to include a loan of up to Rs1 million for overseas workers. This new initiative will cover critical expenses such as skill training, travel and visa costs, and initial settlement expenses for workers seeking employment abroad. Eligible applicants for this loan must be aged between 21 and 45 years, with a valid job offer or recruitment through licensed Overseas Employment Promoters.
The loans will be booked jointly in the name of the overseas worker and a family member—either a parent, spouse, or sibling—residing in Pakistan. The loan tenor is set for up to five years, with repayments structured in equal monthly installments.
This expansion is part of the broader Prime Minister’s Youth Business and Agriculture Loan Scheme, which was launched in January 2023 as a flagship government initiative aimed at promoting youth entrepreneurship. The scheme, which offers business and agricultural loans at simplified terms and lower markup rates, is open to Pakistani citizens aged 18 to 45 with entrepreneurial potential.
The scheme is divided into three tiers, as approved by the Economic Coordination Committee (ECC). It is managed by the Prime Minister’s Youth Programme (PMYP) in collaboration with the State Bank of Pakistan (SBP) and participating banks. The government provides subsidies for the markup and a credit loss guarantee to make the loans more accessible.
As of October 31, 2024, the scheme has made significant strides, disbursing Rs123.06 billion to 249,053 borrowers. In a move to further broaden its scope, the PMYP, in consultation with relevant ministries and the SBP, proposed the inclusion of a new fourth tier (Tier 4). This new tier would focus on providing loans for purchasing laptops, with three categories based on laptop type: Rs150,000 for basic laptops, Rs300,000 for medium-level laptops, and Rs450,000 for advanced laptops.
The aim of Tier 4 is to support students, freelancers, and entrepreneurs in acquiring the necessary technology for academic and business pursuits. Eligible applicants include students from Higher Education Commission-recognized institutions, as well as freelancers and entrepreneurs aged 18 to 30. These loans will be offered with a four-year repayment plan and an end-user rate of 0%, with the bank rate being Kibor plus 3%. The debt-to-equity ratio for these loans will be 80:20, with a risk mitigation mechanism covering up to 29% of the disbursed portfolio.
A budgetary allocation of Rs8.6 billion has been set for Tier 4 for the current fiscal year, with a ten-year budget plan in place.
The Finance Division has emphasized the importance of prioritizing financial assistance for skilled workers seeking overseas employment. In addition, the proposal for Tier 5 of the loan scheme is still under consideration, and its inclusion is expected to be expedited.
The ECC has reviewed and approved the proposal to include Tier 4 in the Prime Minister’s Youth Business and Agriculture Loan Scheme, marking another step in the government’s efforts to empower youth and skilled workers in Pakistan.
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