| S. No | Particulars | Key Features |
| 1 | Eligibility Criteria |
I.
| All men/women holding CNIC, aged between 21 and 45 years with entrepreneurial potential are eligible. For IT/ E-Commerce related businesses, the lower age limit will be 18 years. |
| II. | Small enterprises (startups and existing businesses) as per definition of SBP and owned by youth as per above mentioned age brackets are also eligible. |
| III. | For IT/E-Commerce related businesses, at least matriculation and/or experience of at least six months. |
|
2 |
Loan size
|
| Size of the loan is segregated into two tiers, as under: |
| Tier 1 (T1) loans- Rs 100,000 to Rs. 0.5 million |
| Tier 2 (T2) loans- Above Rs 0.5 million and upto Rs 5 million |
|
| 3 | Loan type |
| Working capital loans and term loans |
|
| 4 | Loan Tenor |
| Upto 8 years with maximum grace period of upto one year. |
|
| 5 | Debt to Equity ratio |
| T1 loans- 90:10 |
| T2 loans- 80: 20 |
| 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. |
|
| 6 | Focus on Women |
| 25% of the loans will go to women borrowers. |
|
| 7 | Security Requirements |
| Security arrangements will be as under: |
| T1 loans: Clean, however, only personal guarantee of the borrower |
| T2 loans: As per bank’s own credit policy |
|
| 8 | Risk Mitigation |
| Government will bear credit losses (principal portion only) on the disbursed portfolio of the banks as under: |
| T1 loans: Upto 50% |
| T2 loans: Upto 10% |
|
| 9 | Allocation in Budget |
| Finance Division shall allocate funds in each fiscal year’s budget as per estimates provided by SBP. Payment will be made on the submission of consolidated claims of all the banks by the SBP. |
|
| 10 | Pricing |
| Pricing for Working Capital & Term Loans: |
| T1 loans: 6% p.a. fixed for the borrower. The government will pay the difference of the cost at KIBOR+500bps |
| T2 loans: 8% p.a. fixed for borrower. Government will pay the difference of the cost at KIBOR+400bps |
|
| 11 | Executing Agency |
| In the first instance, the National Bank of Pakistan (NBP), Bank of Punjab and Bank of Khyber will execute the program under the guidance and supervision of State Bank of Pakistan. Subsequently, SBP will also advise other commercial banks for participation in the program. |
| NBP will continue to play the lead role. NBP’s share in total disbursed loans will be up to 50%. |
|
| 12 | Sectors and Products |
| All sectors. Standardized schemes/ projects/ undertakings designed by SMEDA, or projects designed by private sector service providers or by individuals, themselves will also be admissible. |
|
| 13 | Application Form |
| The Form would be both in English and Urdu and require minimum essential information with a simple format. |
| The processing time will not exceed 15 days and will be stated clearly in the application form. |
| The forms would be readily available both in branches and through dedicated websites of the banks. Non-refundable form processing fee will be Rs. 100 (Rupee One Hundred Only). |
|
| 14 | Monitoring |
| SBP will publish consolidated information about the loans extended under this program for information of the public on quarterly basis on its website. |
|
| 15 | Geographical distribution |
| Whole of Pakistan. In case of Balochistan, at least one branch of NBP will be designated per Division. All non-designated NBP branches will also provide and receive filled application forms and dispatch them to the nearest branches. |
|
| 16 | Additional measures |
| Executing Agencies (EAs) under this program should ensure following additional measures: |
| Criteria for assessing entrepreneurial potential should be developed and implemented. |
| In the case of loans for existing businesses, a robust independent verification mechanism may be introduced to ensure proper utilization of the loans. Further, for new businesses, a robust mechanism for ongoing monitoring of the loans’ utilization should be developed and implemented |
| A mechanism must be introduced to ensure that the prescribed debt-equity ratio has been maintained. Before disbursement of the loans, it should be ensured that the equity is deposited in the bank from the borrower’s own sources where the equity mechanism is in the form of cash. |
|
Post a Comment