Govt adds Tier-4 to PM's youth loan scheme

February 03, 2025 (MLN): The government has expanded the Prime Minister's Youth Business & Agriculture Loan Scheme (PMYB&ALS) by introducing a new 'Tier-4' category, the State Bank of Pakistan (SBP) notified the Presidents/CEOs of all Banks today. 

This addition aims to provide financial support for laptop purchases and assist prospective overseas workers with expenses related to training, travel, visas, and settlement.

Key Details of Tier-4 are as follows: 

Laptop Financing

The purpose of Laptop Financing is to facilitate students from Higher Education Commission (HEC) recognized institutions, freelancers, and young entrepreneurs in acquiring laptops.

Who is eligible?

• Pakistani citizens aged between 18 and 30 years.
• Enrolled in HEC-recognized educational institutions.
• A Memorandum of Understanding (MoU) will be established between universities and participating banks. Universities will refer students through the Prime Minister's Youth Program (PMYP) portal, and banks will provide laptops based on the university's undertaking.
• Loan installments will be incorporated into university fees and collected exclusively through the banks that provided the financing.
• For freelancers and young entrepreneurs, applicants must present a business plan demonstrating the productive use of the laptop and their repayment capacity.
• Banks may consider the combined income of the primary and secondary borrowers when assessing repayment capacity.

Loan Details

• Basic laptops: Up to Rs. 150,000 or actual cost, whichever is lower.
• Medium laptops: Up to Rs. 300,000 or actual cost, whichever is lower.
• Advanced laptops: Up to Rs. 450,000 or actual cost, whichever is lower.

Terms:

• Loan type: Term finance.
• Tenor: Up to 4 years.
• Debt-to-equity ratio: 80:20.
• Bank rate: KIBOR + 3%.
• End-user rate: 0%.

Security: Universities/colleges will hold degrees as collateral until the loan is fully repaid.

Financing for Prospective Overseas Workers

The purpose of Financing for Prospective Overseas Workers is to provide loans covering training, travel, visa-related, and settlement expenses for individuals aiming to work abroad.

Who is eligible?

• Pakistani citizens aged between 21 and 45 years.
• Possession of a valid job offer or recruitment through an Overseas Employment Promoter (OEP).
• Job offers must be authenticated by the respective Pakistani mission abroad, Community Welfare Attachés (CWA), OEP, and the Protector Office.
• Applicants must provide details of overseas training and job offers to justify fund utilization.

Loan Details

• Up to Rs. 1,000,000.

Terms

• Loan type: Term finance.
• Tenor: Up to 5 years.
• Debt-to-equity ratio: 80:20.
• Bank rate: KIBOR + 3%.
• End-user rate: 0%.

Security: Personal guarantee from a family member. Loans may be jointly booked in the names of the family member residing in Pakistan and the prospective overseas worker.

Risk Mitigation

A 25% guarantee on a first-loss basis will be applied to the disbursed portfolio for both laptop financing and loans to prospective overseas workers.

Participating commercial and Islamic banks will serve as the executing agencies for these loans. All loans will be reported in the Electronic Credit Information Bureau (E-CIB).

Other terms and conditions of the scheme remain unchanged.

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