The government has decided to scale back the Kamyab Pakistan Program in order to adhere to the rules of the International Monetary Fund, reported a national daily.
The program had initially planned to spend Rs. 3.7 trillion in providing small loans to seven million families over five years.
However, the government has cut back on the program after the International Monetary Fund (IMF) raised concerns that officials may not be able to ensure that the guarantees on the loans at subsidized rates will be kept within the stipulated limits.
Last week, the Ministry of Finance said that that the government now plans to launch a pilot version of the Kamyab Pakistan Program (KPP) in certain districts of Khyber Pakhtunkhwa and Balochistan instead of across the entire country. The project will be run for about a year, during which officials will assess the risk and borrower appetite. If the initiative succeeds, the government will expand it.
The scaled-down version of the program will be launched within the next few weeks.
The KPP will work with micro-finance providers and housing finance companies that will facilitate affordable liquidity for the disbursement of micro-loans at subsidized rates to small enterprises, farmers, and individuals.
The State Bank of Pakistan (SBP) and the Securities and Exchange Commission of Pakistan (SECP) will publish a list of the executing agencies prior to the launch of the program.
The KPP had originally intended to target three major classes of borrowers. In the first category, the government would launch the Kamyab Jawan Program to provide loans of Rs. 1.2 trillion to 3.5 million borrowers. For the second category, officials had planned to provide loans of Rs. 700 billion to 2.4 million borrowers under the Kamyab Kissan Program. The third category involved the launch of a low-cost housing program that would disburse Rs. 1,800 billion among 1.2 million borrowers.
However, the decision to cut back the program means that these targets will be significantly less ambitious.
