August 10, 2020 (MLN): The State Bank of Pakistan (SBP) has disclosed key features of Prime Minister’s Kamyab Jawan Youth Entrepreneurship Scheme (PMKJ-YES).
According to SBP, financing under PMKJ-YES is available for youth aged between 21 and 45 years for establishing new business or extending existing business.
SMEs owned by youth as per above mentioned age brackets are also eligible. Additionally, for IT/e-commerce related business, minimum age limit is 18 years and minimum education required is matriculation or equivalent.
Under the program, financing is segregated into three tiers. Under tier-1, loan limit is from Rs 100,000 up to Rs 1 million.
Under second plan tier-2, loan limit will be from above Rs 1 million and up to Rs 10 million.
Under the third plan tier-3, loan limit is from above Rs 10 million and up to Rs 25 million.
With regards to interest, for tier-1 loans, markup rate will be 3 percent, for tier-2 loans it will be 4 percent and markup rate of 5% will be charged on tier-3 loans.
Maximum loan tenor will be up to 8 years including grace period of up to one year.
For new businesses, Debt-Equity ratio for tier-1 loans is 90:10, for tier-2 and tier-3 loans is 80:20. For existing businesses, Debt-Equity ratio is Nil for all tiers. The borrower’s contribution of equity would be in the form of cash or immovable property and will be required after approval of the loan.
Tier-1 loans will be clean; however, only personal guarantee of the borrower is required. For tier-2 and tier-3 loans, security requirements are as per executing banks’ own credit policy.
Under the scheme, loan can be availed from commercial banks working as Executing Agencies (EAs).
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