KARACHI: Mark-up rate on Prime Minister’s Youth Business Loans Scheme has been slashed by 200 basis points (bps) to attract borrowers, enabling them to pay back loans easily.
The scheme could not produce the desired results as it was designed with an amount of Rs100 billion and Maryam Nawaz, daughter of Prime Minister Nawaz Sharif, was appointed head of the scheme. However, the National Bank leading the scheme says process of disbursement of loans is in full swing.
The State Bank stated on Thursday that with effect from July 1, 2015, mark-up rate for the existing as well as new borrowers of the scheme has been reduced from 8 per cent to 6pc. The government will continue to pay the difference of the cost at Kibor (Karachi Interbank Offered Rate) +500 bps to all executing agencies.
The Government of Pakistan, and the State Bank launched the scheme under the aegis of the Ministry of Finance to create multiple job opportunities, encouraging entrepreneurial abilities among youth.
The NBP said that it had made significant progress in successfully implementing this scheme. Over 6,100 successful applicants have been provided loans, collectively amounting to over Rs5.2bn.
The scheme was envisioned by the prime minster as a catalyst for benefiting the youth by empowering them economically and by creating multiple job opportunities.
The bank said that it would continue to retain its lead role in the scheme while penetrating into more desirable market segments. The bank started implementation of corporate alliances for the scheme in November 2014. To date it has joined hands with nine most prestigious organisations for the scheme.
The NBP has emphasised on a transparent assessment criteria and processing of loans without any outside intervention.