Last year, Prime Minister Imran Khan launched the Kamyab Jawan Program to support the unemployed youth across the country through financial and technical assistance. As a part of PM Khan vision of creating 10 million jobs, PM Youth Loan Scheme has been developed to provide low-cost business loans to young generation, so that they can utilize their entrepreneurial potential to the fullest. This article is all about How to Get Approved For Prime Minister Youth Loan Scheme.
The youth loan scheme has been developed in collaboration with 3 main departments which include, Pakistan Poverty Alleviation Fund (PPAF), State bank of Pakistan (SBP) and Small and Medium Enterprise Authority (SMEDA). All three departments will work together to provide subsidized loan to the youth and give them the basic aptitude to run a successful business.
Prime Minister Youth Loan Scheme
This loan scheme can be availed to set up a new business or to expand an existing one. But before applying for this loan scheme, you should be aware be of some of its salient features that can help you to get approved for the loan scheme. Following are the features of the loan scheme.
- All men/women/transgender holding a CNIC, aged between 21 and 45 years with entrepreneurial potential can apply for the loan scheme
- For IT/E-Commerce related businesses, the minimum age limit is 18 years.
- Small Enterprises (start-ups and existing businesses) as per definition of SBP, owned by people under above-mentioned age brackets are eligible to apply.
- For IT/E-Commerce related businesses, at least matriculation and/or experience of at least 6 months will be required
Loan Amount and Security
|Tier 1||Rs. 100,000 to Rs. 1 million (without collateral)|
|Tier 2||Above Rs. 1 million upto Rs. 10 million (with collateral)|
|Tier 3||Above Rs. 10 million upto Rs. 25 million (with collateral)|
- For tier 1 loan, you don’t have to provide any guarantee to the lender. Just a personal guarantee of the borrower is enough.
- For tier 2 and 3 loan, any bankable collateral such as a commercial vehicle, gold ornaments, government securities or Mortgage of Property etc. is required. The decision on the collateral will be made by the participating banks.
Loan Type and Tenor
The type of loans youth will get includes:
- Working capital loans
- Term loans
The maximum duration for repayment of a loan under this scheme is 8 years, with a maximum grace period of up to 1 year. However, the exact loan duration and grace period for each loan depends on the type of business, judgement and decision making of participating banks.
Focus on Women
25% of the loans under this scheme will go to the women borrowers.
- For tier 1 loan, the mark-up rate is fixed at 3% per annum for the borrower
- Tier 2 and 3 loan mark-up rate is fixed at 4 and 5% per annum for the borrower respectively
For more details regarding more features of phase 2 of the loan scheme, you can click here.
Now that you know all the salient features of this scheme, all you have to do is apply for the youth loan scheme. To know how it can be done, you can read an article on our website for the complete procedure.
Note: Right now, the registration process is closed. However, you can apply in the upcoming phase 2 of the loan scheme. Once the registration process for phase 2 will start, we will let you know.
In order to get approved for the loan, you need to develop a good business plan and keep some factors in mind before selecting the business.
Factors to Consider before Selecting the Business
Following are the key factors that must be accounted for before selecting your business.
- Regional suitability and appropriateness of business
- Applicant’s motivation and aptitude
- Applicant’s skill set, experience, education and training
- Demand for product/ services of business and existing supply (Competition)
- Business set up cost and gestation time
- Minimum Fixed overheads and break-even point
- Revenues and margins
Developing a Good Business Plan
Once you have selected your business, you need to develop a business plan that can help you in securing the loan. How to develop it? Simply follow the instructions given below.
- First, you need to identify your industry such as retail, wholesale, service etc. You have to clearly define what will be your type of business.
- Identify your customer because you cannot sell or market your product to the customers until you know who they are. You have to do some market research before developing business plan to know about your target audience and the competition in the market.
- Use different business analyses techniques such SWOT, PEST, and STEEPLE etc. to find gaps in the market, foresee various different threats, and leverage strengths and opportunities which you already have or face.
- Select a name for your business. Create a brand identity and set some goals for your business before writing your business plan. Be logical and realistic in setting goals for your business.
- After doing all the research, creating an identity and setting goals for your business, you need to write down all the operations, marketing strategy, financial strategy etc. to create a good business plan.
For this scheme, Small and Medium Enterprise Authority (SMEDA) has given some guidelines and template on their website that can help applicants in creating a good business plan for themselves. Click here for the complete template and business plan guidelines for this scheme.
There you have it guys! This is all you need to know about How to Get Approved For Prime Minister Youth Loan Scheme. If you have any question pertaining to the topic, hit us up in the comments section.