ISLAMABAD: The federal government has introduced a cost-sharing, interest-free loan scheme to promote electric bikes, rickshaws, and loaders in a bid to reduce fuel use and support green technologies in the transport sector.
According to a circular issued by the State Bank of Pakistan (SBP), the scheme, titled Cost Sharing Scheme for Electric Bikes and Rickshaws or Loaders, will provide markup-free loans to buyers, with the government covering the entire interest amount.
Target and Allocation:
The programme aims to finance 119,170 vehicles during FY2026, including 116,000 electric bikes and 3,170 electric rickshaws or loaders.
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25% of e-bikes will be reserved for women.
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10% of e-bikes will go to small businesses such as courier or delivery services.
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30% of rickshaws/loaders will be allocated for fleet operators.
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Two-Phase Rollout:
The scheme will be carried out in two stages:
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Phase One: Financing of 40,000 e-bikes and 1,000 rickshaws/loaders.
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Phase Two: Financing of 76,000 e-bikes and 2,170 three-wheelers.
The repayment period will be two years for e-bikes and three years for rickshaws or loaders. Borrowers will only pay the principal amount and insurance through monthly installments, while the government will pay the full markup.
Eligibility Criteria and Age Limit:
All Pakistani citizens, including residents of Gilgit-Baltistan and Azad Jammu & Kashmir, are eligible.
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For e-bikes: Age limit is 18 to 65 years.
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For rickshaws/loaders: Age limit is 21 to 65 years.
Fleet operators must meet additional rules set by the scheme’s Steering Committee.
Loan Size and Subsidy:
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E-bike loan: Rs200,000
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E-rickshaw/loader loan: Rs880,000
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Borrower equity: 20% of total cost (can be covered by subsidy).
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Capital subsidy:
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Up to Rs50,000 for e-bikes.
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Up to Rs200,000 for e-rickshaws/loaders.
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If the subsidy fully covers the 20% equity, the borrower will not need to make any upfront payment.
Banks will calculate financing using the 6-month Kibor plus 2.75%, but buyers will pay zero interest since the government will bear the cost.
This initiative is part of the government’s plan to cut fuel imports, reduce pollution, and encourage sustainable transport solutions across the country.
Here are the Details of Eligibility Criteria, Markup, Installment, and Other Information:
| Parameter | Eligibility Criteria |
|---|---|
| Scheme Size | The scheme will finance 116,000 e-bikes and 3,170 e-rickshaws/loaders during FY 2025-26. Quota allocation: – Minimum 25% of e-bikes for females. – Maximum 10% of e-bikes for business use (e.g., courier or delivery services). – Maximum 30% of rickshaws/loaders for fleet operators. The scheme will be implemented in two phases: – Phase 1: 40,000 e-bikes and 1,000 e-rickshaws/loaders. – Phase 2: 76,000 e-bikes and 2,170 e-rickshaws/loaders. |
| Eligibility to Apply | All citizens of Pakistan, including Gilgit-Baltistan and Azad Jammu & Kashmir, subject to age restrictions. Fleet operators may also apply for rickshaws/loaders based on criteria set by the Steering Committee. |
| Age Limits | E-bikes: Minimum 18 years, maximum 65 years. Rickshaws/loaders: Minimum 21 years, maximum 65 years. |
| Type of Financing | Conventional and Islamic finance options available. |
| Loan Size | E-bike: Up to Rs200,000. Rickshaw/Loader: Up to Rs880,000. Borrowers must pay any amount exceeding the capital subsidy as upfront equity, following the 80:20 debt-to-equity ratio. |
| Capital Subsidy | – Up to Rs50,000 for e-bikes. – Up to Rs200,000 for rickshaws/loaders. Subject to the Debt:Equity ratio rule. |
| Debt: Equity Ratio | 80:20 (20% down payment). Equity includes both capital subsidy and borrower’s contribution. If the subsidy fully covers the 20% equity, the borrower will not need to pay upfront. |
| Loan Tenor | – E-bikes: Maximum 2 years. – Rickshaws/loaders: Maximum 3 years. |
| Bank’s Pricing | 6-month KIBOR + 2.75%. |
| End User Rate | 0%, with the federal government covering the full markup. |
| EMI | EMI will include principal amount and insurance only. |
| Lending Platform | Fully digital process with minimal human interaction. Banks will integrate with the platform to share information. |
| OEMs/Vendors & Shortlisted Vehicle Models | Shortlisted by the Engineering Development Board (EDB). OEMs must ensure timely delivery and after-sales service. |
| Debt Burden Ratio | As per SBP Prudential Regulations. |
| Credit Scorecard | Based on each bank’s risk appetite and credit policy. |
| Income Estimation | Verified through salary slips, bank statements, or proxy methods. |
| Charges on Early Settlement | Nil |
| Loan Processing Charges | Nil |
| Late Payment Charges | As per each bank’s Applicable Schedule of Charges (APSC). |
| Repossession Charges | Borrower will bear APSC costs. |
| Registration Charges | To be borne by borrower. |
| PMD and Other Checks | The federal government will arrange PMD checks and NADRA Verisys checks at no cost to the borrower. |
| Insurance Payment | First-year insurance to be paid in advance. Subsequent yearly insurance will be pro-rated in EMI. Rates will be set in coordination with MoI&P and insurance companies. |
| Credit Loss Guarantee (CLG) | 20% Portfolio Guarantee on a First Loss Basis. |
| CLG Claim Stage | After 180 days from the due date of an unpaid installment. |
| Mandatory Documentation | Valid CNIC and Digital Undertaking for Driving License. |
