Entrepreneurship has become the new norm these days. Young students are not willing to do jobs and would rather come up with their own ideas for a business and the influence of the internet then takes over. If their idea gets enough traction they are able to move forward with their ideas. However, it is not as easy as it sounds. In Pakistan too, this culture is slowly gaining a lot of attention from university students who are ready to put their time onto their ideas, but again, its not just about time, its mainly about the capital to finance it. PM khan loan scheme.
The rise of Silicon Valley into billionare companies is evidence to the success that entrepreneurs can achieve and thus PM Khan plans to encourage the same level of confidence here in Pakistan as well by making banks give out loans to young entrepreneurs with the interest of the loans being paid of by the government and the loans ranging from 1 lakh pkr to 50 lakh pkr. The lack of Venture Capitalist funds mean the youngsters with bright ideas donot have an outlet to show off their idea too. But with the latest scheme, they would be able to get reasonable loans from the banks which include National Bank, Bank of Punjab and Bank of Khyber. The age restrictions for the loans are from 21 to 45 years. The first loan would be in the range of 1 to 5 lakh pkr and if the business is as successful as estimated the second loan would be ranging from 5 to 50 lakh pkr. Teens of 18 can also exploit this scheme for e-commerce and IT purposes.
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These loans would be made available in the shape of term loans that would spread over a period of 8 years. In the first grade of loans, youngsters would have to add 10% of the required capital from their pockets as well, which is increased to 20% for the second grade loans.
The loans of 1 to 5 lakh pkr would be given on personal guarantee while the loans of the second grade would be given according to the terms of the concerned bank. In the case of loss of the entire capital, the government would pay 50% of the entire total while in cases of the loss of second grade loans the government would pay 10% of the total amount. The initial loans would be given by National Bank accounting for 50% of the total while, the rest would be divided between the Bank of Punjab and Khyber Bank. The Government is also encouraging other private banks to participate in the scheme as well for the nourishment of entrepreneurship in Pakistan.
