Kamyab Pakistan Program to Offer Loans Worth Rs. 700 Billion to Overseas Pakistanis

The government has decided to provide Rs. 0.3 million as interest-free loan to the prospective low Income Overseas Workers under the banner of the Kamyab Pakistan Program (KPP).

Reliable sources told ProPakistani that the Steering Committee of the Finance Division had approved a request by the Ministry of Overseas Pakistanis and Human Resource Development (OP&HRD) for the provision of interest-free loans to the prospective low-Income Overseas Workers.

Earlier, the Ministry of Overseas Pakistanis and Human Resource Development (OP&HRD) had asked the Steering Committee of the Finance Division to arrange for the provision of funds for the distribution of subsidized loans to the eligible intending emigrants.

In a meeting held at the Finance Division last month under the Finance Minister, the Secretary Ministry of OP&HRD in a presentation recommended the inclusion of the overseas Pakistani component under KPP based on their contribution to Pakistan’s economy through remittances and argued for providing interest-free loans to the low-income Pakistani workers for meeting their initial expenses on travel, lodging, etc.

Components under KPP will generate multiple benefits such as increasing the number of Pakistani workers abroad, encouraging the use of formal channels for remittances, reducing Poverty, and bridging the balance of payment gap. He gave the projected number of Beneficiaries for the financial year 2021-22 along with financial implications and also for the future years up to the year 2028. As per the projected figure

To find out the projected beneficiaries and impact of the program per year and for the next six years till 2028, calculations have been made on three different scenarios. The first scenario is based on 18 percent beneficiaries of the total target audience, the second 50 percent, and the third 100 percent beneficiaries.

After application of PMT score 49, under scenario first of 18pc beneficiaries, from 4th quarter of FY 2021-22 till FY 2027-28, the total number of beneficiaries will be 420,130 (starts from 10,180 during 4th Quarter of FY2021-22 and will reach to 92,195/year by FY 2027-28 at 15pc increment rate). The total impact of the estimated funds’ requirement for 18pc beneficiaries will be approximately Rs. 126 billion.

Under scenario two of 50 percent, projected beneficiaries during six years will be 1,167,042, and it will have a financial impact of Rs. 350 billion. As per scenario three of 100 percent, the number of beneficiaries will be 2,334,106, and its financial cost will be Rs. 700 billion.

The introduction of the Overseas Workers component under the Kamyab Pakistan program (KPP) to provide interest-free loans to the prospective low-Income Overseas Workers was approved by the Steering Committee subject to the following observations; The loan amount would be Rs. 300, 000 per borrower, families up to a PMT score of 49 will be covered, wholesale lending model of KPP as earlier approved by the Cabinet will be followed, and the loans will be disbursed through MFIs under the wholesale lending model. The detailed eligibility criteria for the borrowers will be worked out by the Ministry of Overseas Pakistanis and Human Resource Development (OP&HRD).

The committee further said that the financial projections indicating Markup Subsidy and expected less ratio as approved by the Cabinet vide its decision No. 931/32/2021 dated 28.09.2021 for the KPP shall remain the same, and the Overseas Workers component will be accommodated from within the existing approved projections.

However, the measure will change the existing number of borrowers for the Kamyab Karobar component of KPP, and therefore, the projections associated with the Kamyab Karobar component to make provisions for the Overseas Workers component while remaining within the overall subsidy and expected credit loss projections of the program.
Based on the recommendation of the Steering Committee the Ministry of Finance will submit a summary for the ECC of the Cabinet for approval.