Many aspiring entrepreneurs have trouble getting the funds they need to start their businesses because they don’t qualify for bank loans and other financing options.
If you’re one of them, here are many different ways to get an Instant interest-free loan to start a new business in Pakistan and some of the pros and cons of each method.
Be sure to plan ahead before committing to any one option so that you can make the best decision for your business moving forward.
Here are 3 different ways to get an interest-free loan to start a new business in Pakistan.
Recommended Reading: Business Loan In Pakistan | Loan For Business In Pakistan Without Interest
Loan To Start A New Business In Pakistan | Online Loan To Start A New Business In Pakistan
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Recommended Reading: Loan For Business In Pakistan Without Interest (25K-5Lakh) | Ihsaas Trust
Government Loans For Small Business In Pakistan
Many people in Pakistan are eligible for without-interest loans from the government. If you’re running a small business and need to borrow up to PKR 1,000,000 for up to five years, you may be able to get this without interest loans from the government.
This is beneficial because there are no additional fees or charges that come with it. The only downside is that getting this loan can take some time as the loan application process takes about three months to complete.
Interest rates on these loans depend on your credit score, which will determine whether you qualify for one of these loans or not.
Remember that if you don’t qualify for one of these loans, there are still other options available to help you get a without-interest loan in Pakistan!
Recommended Reading: How To Get SME Loan In Pakistan (Government+Private Sector)
Government Business Loan Schemes | Prime Minister Loan Scheme
Here is a simple table summarizing the two government schemes for interest-free loans for businesses in Pakistan:
| Scheme | Description | Eligibility | Loan Amount | Terms |
|---|---|---|---|---|
| Youth Business Loan | Provided by the State Bank of Pakistan. | Ages 21-40, no prior business ownership experience. | Up to Rs. 2 million | Requires collateral, must repay within one year. |
| Prime Minister’s Interest-Free Loan Scheme | Available to all Pakistani citizens for self-employment enterprises or small-scale industrial or agricultural activities. | Over 18 years old, no prior business ownership experience. Existing business owners must show equity. | Up to Rs. 2 million | No collateral is required, and there is no requirement to repay within one year. |
Bank Loans | Personal Loan To Start A New Business In Pakistan
The second way to get an interest-free business loan is from a bank. To get an interest-free business loan, you must show that you have a viable plan and that the bank can recoup its investment in your company’s success.
| Bank | Loan Type | Loan Amount | Interest Rate | Repayment Period | Special Features |
|---|---|---|---|---|---|
| Bank Alfalah | without interest loan | Rs. 5 million – Rs. 25 million | As low as 6% per annum | 12-36 months | Lower interest rates than personal credit lines. |
| United Bank Limited | without interest loan | Rs. 5 million – Rs. 25 million | As low as 6% per annum | 12-36 months | Payments reduce the principal amount of the loan. |
| Habib Bank | without interest loan | Rs. 5 million – Rs. 25 million | As low as 6% per annum | 12-36 months | Competitive interest rates, tailored for business needs. |
| Various Banks | Business Start-Up / Loan Guarantee Programs | Up to Rs. 5 million – Rs. 10 million | Higher rates due to low documentation or collateral required | Varies | Suitable for initial purchases like inventory and equipment. |
Recommended Reading: 5 Easy Ways To Get Startup Business Loans In Pakistan | Startup Loan In Pakistan
Personal Loans From NGOs | NGO Loan For Business
The third way to obtain a loan is from an NGO. Many NGOs offer interest-free loans to help people start businesses.
The loans are usually for small amounts, as the NGO wants to see you succeed and repay the loan.
| Loan Type | Description | Amount Range | Duration | Profit Rate | Interest Rate | Application Fee | Mutual Support Contribution |
|---|---|---|---|---|---|---|---|
| Family Loan: | For starting or growing family businesses. | Rs. 10,000-50,000 | 10-38 months | 0% | None | Up to Rs. 200 | Optional 1% of loan amount |
| Agriculture: | For small farmers to buy supplies. | Rs. 10,000-50,000 | 4-8 months | Suggested | None | None | Optional 1% of loan amount |
| Liberation: | To pay off high-interest loans. | Rs. 10,000-100,000 | 10-36 months | Not specified | None | Up to Rs. 200 | Optional 1% of loan amount |
| Housing: | For home repairs and building. | Rs. 10,000-100,000 | Not specified | Not specified | None | Up to Rs. 200 | Optional 1% of loan amount |
Recommended Reading: Small Business Loan In Pakistan | Business Loan In Pakistan
Pros And Cons Of Getting A Business Loan
| Pros | Details |
|---|---|
| Maximum Loan Amount: | Rs. 250,000 |
| Number of Loans: | No limit on the number of loans you can take |
| Purpose: | Grow your company or use it for seed capital |
| Security: | Not needed |
| Business Assistance: | Help provided to come up with a business idea if you don’t have one |
| Interest Rate: | Interest-free loans |
| Repayment: | No profit made from your failure if you can’t repay |
| Local vs. International Loans: | Terms vary; local banks may offer better terms for entrepreneurs |
| Example: | ADB loans from Japan have stricter terms than local Pakistani banks |
Interest-Free Loan In Pakistan FAQs
What are government schemes to get an interest-free loan in Pakistan?
Youth Business Loan and Prime Minister’s Interest-Free Loan Scheme give interest-free loans for businesses In Pakistan.
Can we get Business Loans from International Banks?
Yes, we can get business loans from International Banks like ADB, World Bank, and many more.
Recommended Reading: How To Get Bank Islami Business Loan | Bank Islami Loan For Business
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