ISLAMABAD: The federal government has launched a new initiative offering soft loans of up to Rs One million for prospective overseas workers to cover expenses related to training, travel, and visas.
Additionally, the government will provide loans of up to Rs 450000 to students, freelancers, and young entrepreneurs to buy laptops for educational, digital skills, and entrepreneurial purposes.
Expansion of PMYB&ALS Scheme
The State Bank of Pakistan (SBP) has announced the expansion of the Prime Minister’s Youth Business & Agriculture Loan Scheme (PMYB&ALS). This includes new financial assistance for laptop purchases and overseas workers’ expenses. The new tier, called “Tier-4,” aims to support students, freelancers, and young entrepreneurs.
Loan Details for Overseas Workers
Under the new loans, prospective overseas workers can borrow up to Rs1 million with a repayment period of up to 5 years. These loans will cover training, travel, visa, and settlement costs. The debt equity ratio is 80:20, with the bank rate set at KIBOR+3 and a zero percent end-user rate. Applicants must be Pakistani citizens aged between 21 and 45 with a valid job offer or letter from an Overseas Employment Promoter (OEP). The job offer must be verified by Pakistan’s overseas missions, OEP, and the Protector Office.
Laptop Loans for Students and Entrepreneurs
For laptop purchases, loans are available to students aged 18 to 30 years from Higher Education Commission (HEC)-recognized institutions, as well as freelancers and young entrepreneurs. Banks will partner with universities to provide financing. Loan repayments will be added to student fees, and payments will be made through the bank that provided the loan.
Freelancers and entrepreneurs seeking laptop loans will need to submit a business plan to demonstrate how they will use the laptop productively. Banks will assess the borrower’s repayment capacity, including considering joint family income. Loan amounts range from Rs150,000 for basic laptops to Rs450,000 for advanced laptops, with repayment over four years. The debt equity ratio is 80:20, and the bank rate is KIBOR+3, with a zero percent end-user rate.
Security Requirements and Guarantees
Universities or colleges may keep the borrower’s degree as collateral for laptop loans, and personal guarantees from family members are accepted. Similarly, overseas workers must provide a personal guarantee from a family member, and the loan can be co-signed by family members in the country.
The SBP has announced a 25 percent guarantee from the government to cover the first loss on disbursed loans, with all commercial and Islamic banks participating in the financing.