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Public seems more worried than happy over PM’s loan schemeLAHORE: Recently Prime Minister Nawaz Sharif inaugurated the Business Loan Scheme for the youth with the hope that it would open new avenues for the educated but unsettled, unemployed and jobless youths who are looking for establishing or extending their business enterprises.
The prime minister’s scheme comprises youth business loans, youth training scheme, youth skills development scheme, laptops scheme, and the scheme for reimbursement of dues of students from backward areas of the country. All men and women holding a CNIC, aged between 21 and 45 years, having entrepreneurial potential can apply for the prime minister’s Youth Business Loan scheme.
Under the loan scheme 350,000 youth will be given loans. As the first step, the government plans to disburse Rs 100 billion among 100,000 loan-seekers who will be able to apply for a sum between Rs 100,000 to Rs 2 million. Maryam Safdar, elder daughter of Prime Minister Nawaz Sharif, has been appointed as chairperson of the Prime Minister’s Youth Programme. She will be acting as focal person with the onus to administer, coordinate, manage and supervise the implementation of the programme.
While inaugurating the programme, the prime minister said that through the business loan scheme he wanted to enable the youth to play a positive and active role in the progress and prosperity of the country. Interestingly, a major focus on women has been stressed under this scheme as some 50 percent of loans will go to women borrowers, while 5% quota has been allocated to families of shaheeds, widows and disabled persons.
The launch of the Prime Minister’s Youth Business Loan Scheme has generated excitement and is a ray of hope, particularly for the unemployed youth, as the programme plans to help and encourage educated, energetic but poor people of Pakistan.
The initiative has attracted a good number of loan seekers, as a spokesperson for the Small and Medium Enterprise Development Authority (SMEDA) told Daily Times that they had recorded around 5.5 million downloads of forms for the scheme until now, and the number of applicants is increasing.
However, the terms and conditions of the youth scheme launched by the government are not in favour of majority of the people, especially the poorer class. Not only favourable conditions but transparency and easy accessibility are essentials to the success of such a programme. Another crucial factor is the creation of a favourable environment for loan utilisation. Both transparent accessibility to loans and favourable environment for their utilisation are yet to be ensured to the unskilled and unsettled youth, as corruption, favouritism as well as terrorism have badly engulfed the whole country.
The government, however, seems striving seriously to resolve the matter of tough conditions for the loan and might come up with a genuine solution soon, as Prime Minister Nawaz seems very committed to the scheme. He is always in touch with the chairperson of the scheme and conducting meetings to review the programme. Surely, he cannot see a project headed by his daughter, Maryam, fall apart.
Initially, the aspirants download application forms from the National Bank of Paksitan website and the website of SMEDA. The form has three pages. Two pages require personal information while the third is about two references and one guarantor.
The NBP has issued another form, “guarantor consent form”, which requires that the applicant provide the guarantee of some one with some solid financial background, or a collateral of 150 percent unmovable property against the loan.
The form demands guarantee from a government servant of BPS-15. This is definitely not possible for a common and poor man or woman to achieve. In either case the guarantee is needed from a rich person who should have at least one-and-a-half times the money against which the loan is sought.
It is partially possible but not easy for poor people. Besides, a guarantor is required to undergo a strict official verification process and sign an agreement that partially serves NBP interests.
In short, the guarantor has to accept responsibility for repayment of the loan in case of default, and this discourages people from becoming guarantors. KD Kalandrani, a philosophy student at FCC Lahore, suggests, “The prime minister should consider simplification of the procedure enabling the youth to obtain loans from banks easily. Provincial governments can stand as guarantors for such loans.”
Another student, Zaheer, insists, “The loan scheme seems more suitable for those who are already in business as businessmen do not need to worry about finding a guarantor; they can collateralise their loans.” He adds, “They are money-bagged; they have everything, but what do the poor guys have except a small house, with no property.” Latif Ahmed, a bachelor from Azad Jammu and Kashmir who runs a headdress shop in Barket Market, Lahore, says, “I wanted to apply for the loan to extend my business, but how would a poor applicant like me from a rural area manage a guarantor under BS-15, as I neither have any employed relative nor a friend?” With these conditions, he said, one can assume that the loan scheme is meant to benefit only the rich class.
Not so, says Majid Baloch, a sociology student at the Punjab University. “Finding a guarantor shouldn’t be that much of a troublesome job because if a loan seeker has a good business plan, it should not be difficult for him to persuade someone to be his/her guarantor or else no one should have any doubt or fear to become his/her guarantor,” he added. The banks on the other hand seem reluctant to participate in this scheme. A private bank manager told Daily Times, “I’d rather the government spared us. But if we’re forced to join it, we will demand two things: one, the guarantors should be made liable to pay the defaulted amount; two, the government should share losses with the banks.”
Courtesy www.dailytimes.com.pk