The Prime Minister Loan Scheme is a Pakistani government-backed initiative designed to provide access to affordable and low-interest loans to small business owners and agricultural entrepreneurs in the country.
This program aims to stimulate economic growth by encouraging small business owners and entrepreneurs to start or expand their businesses. The Prime Minister Loan Scheme offers several features, including no collateral requirements, a low-interest rate of 0-7% per annum, and a repayment period ranging from 8 to 10 years.
The scheme is managed by the Small and Medium Enterprises Development Authority (SMEDA) and is offered through various participating banks and microfinance institutions, including the National Bank of Pakistan and Akhuwat Microfinance, etc. among others.
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Kamyab Jawan Program | Prime Minister Loan Scheme
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- Kamyab Jawan Program | Prime Minister Loan Scheme
Recommended Reading: Prime Minister Youth Loan Scheme 2024 Online Apply {Updated}
Prime Minister Loan Scheme Key Features
The Prime Minister’s Loan Scheme is a government-backed loan program designed to provide financial assistance to entrepreneurs and small business owners in Pakistan.
Here are the key features of the Prime Minister loan scheme:
| Feature | Details |
|---|---|
| Security | No collateral is required for loans under PKR 1 million |
| Government Guarantee | 50% guarantee for loans up to PKR 1 million 60% guarantee for loans above PKR 1 million |
| Interest Rate | 0% – 7% per annum |
| Repayment Period | 2 to 10 years |
Range of Loans and Interest Rates
The range of loans or amounts offered and interest rates are given in the following image. This scheme offers PKR 0.5 Million to PKR 7.5 Million at interest rates of 0 to 7% respectively for a maximum duration of up to 10 years.
The details of this scheme are as follows:
| Tier | Loan Amount Range | Markup Rate | Description |
|---|---|---|---|
| Tier 1 | Up to 0.5 Million PKR | 0% | Suitable for small-scale business projects needing minimal financing |
| Tier 2 | Above 0.5 Million up to 1.5 Million PKR | 5% | For entrepreneurs requiring higher financing to support their business projects |
| Tier 3 | Above 1.5 Million up to 7.5 Million PKR | 7% | Designed for large-scale business projects needing significant financing |
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Banks and Microfinance Institutions Involved In Prime Minister Loan Scheme
The banks and microfinance institutions that are managing this entire scheme are given in the following image.
| S.No | Bank | MFBC/MFIs |
|---|---|---|
| 1 | Bank of Punjab | Akhuwat Islamic Microfinance, NRSP |
| 2 | National Bank of Pakistan | NRSP |
| 3 | Askari Bank | Akhuwat Islamic Microfinance, Thardeep Microfinance Foundation, Damen Support Program |
| 4 | Habib Bank Limited | Akhuwat Islamic Microfinance |
| 5 | Meezan Bank | Akhuwat Islamic Microfinance |
Eligibility Criteria
The eligibility criteria for the Prime Minister Loan Scheme App are as follows:
| Eligibility Criteria | Details |
|---|---|
| Age Limit | 18 to 45 years |
| Citizenship | Pakistani citizen |
| Educational Qualification | At least a Matriculation certificate or equivalent |
| Business Plan | Submission of a well-structured business plan |
| Guarantor | At least 2 personal guarantors or collateral |
| Credit History | Clear credit history with no previous defaults |
| Nature of Business | Available for business and agriculture projects only |
| Loan Purpose | Must be utilized for the specific purpose mentioned in the business plan |
| Loan Repayment | Ability to repay the loan within the stipulated time frame |
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Documents Required
| Document Type | Details |
|---|---|
| National Identity Card | A valid national identity card (CNIC) |
| Guarantor’s CNIC | CNIC of the personal guarantor |
| Business Plan | Detailed business plan outlining the proposed project |
| Educational Certificates | Certificates such as Matriculation, Intermediate, or Bachelor’s degree |
| Bank Statement | Bank statement for the last six months |
| Income Proof | Salary slips or business income statements |
| Photographs | Passport-sized photographs of the applicant and guarantor |
| Utility Bills | Recent utility bills of the applicant’s residence or business address |
| Collateral Documents | Collateral documents, if applicable |
| Other Certificates | Any other relevant certificates or documents pertaining to the project, such as licenses, permits, or registration documents |
Prime Minister Loan Scheme Online Application Process
Here are the step-by-step instructions for applying for the Prime Minister’s Loan Scheme:
Eligibility Checking
Step 1: Eligibility Check Before applying for the loan scheme, applicants must check whether they meet the eligibility criteria. The eligibility criteria include:
- Pakistani National
- Age between 21-45 years
- Businesses must be registered with FBR, Provincial Revenue Board, or District Industries Center
- Business must be from an approved sector
- No default in bank loans or any government organization
Business Plan
Step 2: Business Plan Preparation After confirming eligibility, the next step is to prepare a comprehensive business plan.
Selection of Bank Or Institution
Step 3: The Prime Minister’s Loan Scheme is offered through participating banks and microfinance institutions.
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Application Form Submission
Step 4: The applicant can obtain the application form from the official website of the PM Youth Program from the selected bank’s website or by visiting the bank’s branch.
- Copy of Computerized National Identity Card (CNIC)
- Two passport-sized photographs
- Copy of NTN certificate
- Copy of sales tax registration certificate
- Copy of the latest utility bill
- Project feasibility report
Processing Of Application
Step 5: Once the application form is submitted with the required documents, the bank will process the loan application.
The bank may request additional information or documents as part of the loan application process. The bank will also evaluate the business plan to determine the feasibility of the project.
Loan Disbursement
Step 6: Once the loan application is approved, the loan amount will be disbursed to the applicant’s bank account.
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Pros And Cons Of the Prime Minister Loan Scheme
Pros:
- Easy Access to Finance: The Prime Minister’s Loan Scheme provides easy access to affordable and low-interest loans to small business owners and entrepreneurs who may not have access to traditional bank loans due to a lack of collateral or credit history.
- No Collateral Requirement: The loan scheme does not require any collateral, making it easier for small business owners and entrepreneurs to obtain loans.
- Low-Interest Rates: The scheme offers a low-interest rate of 6% per annum.
- Longer Repayment Period: The scheme provides a repayment period ranging from 8 to 10 years, which provides more time for small business owners and entrepreneurs to repay the loan.
- Technical Assistance and Advisory Services: The loan scheme provides technical assistance and advisory services to help small business owners and entrepreneurs succeed.
Cons:
- Limited Eligibility: The scheme is only available to small business owners and entrepreneurs who meet specific eligibility criteria, which may limit its accessibility to certain groups of people.
- Risk of Default: As with any loan, there is a risk of default. Small business owners and entrepreneurs who are unable to repay the loan may face legal action or other consequences.
- Lack of Awareness: Many small business owners and entrepreneurs may not be aware of the Prime Minister’s Loan Scheme, which may limit its accessibility to those who need it the most.
- Limited Funds: The funds available under the scheme may be limited, which may restrict the number of loans that can be provided.
- Lengthy Application Process: The application process for the loan scheme can be lengthy, which may discourage some small business owners and entrepreneurs from applying.
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FAQs | Prime Minister Loan Scheme
What is the age limit for the Prime Minister Loan Scheme?
To be eligible for the Prime Minister Loan Scheme, applicants must be Pakistani nationals between the ages of 21 and 45 years.
For IT Businesses minimum age limit is 18 years.
What is the maximum loan amount available under the Prime Minister Loan Scheme?
The maximum loan amount available under the scheme is up to Rs. 7.5 million.
What is the interest rate for the Prime Minister Loan Scheme?
The interest rate for the scheme is 0-7% per annum depending upon the loan amount.
What is the repayment period for the Prime Minister Loan Scheme?
The repayment period for the scheme ranges from 2 to 10 years.
Can I apply for the Prime Minister Loan Scheme if I already have a loan from a bank?
It depends on the bank’s policies and the credit status of applicants.
Some banks may allow you to apply for the loan scheme even if you already have a loan, while others may not.
How long does it take for the loan to be disbursed under the Prime Minister Loan Scheme?
The time it takes for the loan to be disbursed depends on the bank’s policies and the loan application process.
Generally, it takes several weeks to a few months for the loan to be disbursed.
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