3 Ways To Get An Interest-free Loan To Start A New Business In Pakistan

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


Table of Contents

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:

SchemeDescriptionEligibilityLoan AmountTerms
Youth Business LoanProvided by the State Bank of Pakistan.Ages 21-40, no prior business ownership experience.Up to Rs. 2 millionRequires collateral, must repay within one year.
Prime Minister’s Interest-Free Loan SchemeAvailable 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 millionNo collateral is required, and there is no requirement to repay within one year.
Table: Government-Business-Loan-Schemes

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.

BankLoan TypeLoan AmountInterest RateRepayment PeriodSpecial Features
Bank Alfalahwithout interest loanRs. 5 million – Rs. 25 millionAs low as 6% per annum12-36 monthsLower interest rates than personal credit lines.
United Bank Limitedwithout interest loanRs. 5 million – Rs. 25 millionAs low as 6% per annum12-36 monthsPayments reduce the principal amount of the loan.
Habib Bankwithout interest loanRs. 5 million – Rs. 25 millionAs low as 6% per annum12-36 monthsCompetitive interest rates, tailored for business needs.
Various BanksBusiness Start-Up / Loan Guarantee ProgramsUp to Rs. 5 million – Rs. 10 millionHigher rates due to low documentation or collateral requiredVariesSuitable for initial purchases like inventory and equipment.
Table: Personal-Loan-To-Start-A-New-Business-In-Pakistan

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 TypeDescriptionAmount RangeDurationProfit RateInterest RateApplication FeeMutual Support Contribution
Family Loan:For starting or growing family businesses.Rs. 10,000-50,00010-38 months0%NoneUp to Rs. 200Optional 1% of loan amount
Agriculture:For small farmers to buy supplies.Rs. 10,000-50,0004-8 monthsSuggestedNoneNoneOptional 1% of loan amount
Liberation:To pay off high-interest loans.Rs. 10,000-100,00010-36 monthsNot specifiedNoneUp to Rs. 200Optional 1% of loan amount
Housing:For home repairs and building.Rs. 10,000-100,000Not specifiedNot specifiedNoneUp to Rs. 200Optional 1% of loan amount
Table: NGO-Loan-For-Business

Recommended Reading: Small Business Loan In Pakistan | Business Loan In Pakistan

Pros And Cons Of Getting A Business Loan


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
Table: Pros

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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