Youth loan limit raised to Rs25 million under PM's business and farm schemes
The maximum loan under the Prime Minister's Youth Business and Agriculture Loan Scheme has risen from Rs7.5 million to Rs25 million. Programme chairman Rana Mashhood Ahmed Khan announced the change on Tuesday.
- Maximum loan raised from Rs7.5 million to Rs25 million
- New Tier Four loans carry an 8-year repayment period and 8 percent profit rate
- Applicants can apply through the programme's website and mobile app
Rana Mashhood Ahmed Khan, chairman of the Prime Minister's Youth Programme, announced that the maximum financing limit under the Prime Minister's Youth Business and Agriculture Loan Scheme has been raised from Rs7.5 million to Rs25 million, a more than threefold increase. Daily Times reported the announcement was made on Tuesday.
The new Tier Four category provides loans in the higher range, with a repayment period of 8 years and a profit rate of 8 percent. The tier is meant to help small businesses grow into large employers. Mr Khan said, in a statement reported in Urdu, that Tier Four can turn today's small business into an institution giving jobs to hundreds of people tomorrow (translated from Urdu).
Applicants aged 21 to 45 can apply for loans. In the IT and e-commerce sectors the minimum age is 18. For Tier Three and Tier Four, the banks' profit margin has been reduced to KIBOR plus 2.4 percent, while the rate paid by borrowers stays unchanged. Reducing bank margins saves the government Rs600 million for every Rs10 billion provided.
Daily Pakistan reported figures on the scheme's record. Since January 2023, 581,341 young people have received loans totalling Rs31,390 million, which the loans have reportedly helped create about 1,820,000 jobs. It said ten times more young people received loans in under four years than in the previous ten years.
According to the same report, 62 percent of recipients are in the agriculture sector. More than 121,000 young women have received loans worth Rs3,660 million. Over 99 percent of loans have been repaid, and the rate of unrecoverable loans is 0.74 percent.
A target of Rs29,250 million in loans has been set for fiscal year 2026-27. About 266,700 young people are expected to benefit, and about 835,000 jobs are expected to be created. Three out of every four young borrowers are to be given interest-free Tier One loans.
Young people can submit applications through the Prime Minister's Youth Programme website and mobile app.
Background
khabr.pk reported on 8 November that the maximum loan under the youth business and agriculture schemes had risen from Rs7.5 million to Rs25 million, and that the minimum age for applicants had been cut from 21 to 18. The latest announcement adds the terms of the new tier and the scheme's performance figures.
Why it matters for Pakistan
Young Pakistanis running or planning small businesses or farms can now apply for loans up to Rs25 million, instead of Rs7.5 million. Tier Four borrowers would repay over 8 years at an 8 percent profit rate. Applicants in IT and e-commerce can apply from age 18. With 62 percent of past recipients in agriculture, farming borrowers are the largest group so far.
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