Punjab government has decided to launch a ‘Credit Guarantee Scheme’ for the provision of soft loans to youths interested in initiating their own businesses.
Under the scheme, youth will be provided credit line amounting up to Rs3 million. Under the cheme, which will be launched under the Punjab Industries Department, loans will be provided to women on easier terms.
Prime Minister Imran will formally launch of the Credit Guarantee Scheme.
Punjab Minister for Industries Mian Aslam Iqbal said the department has completed initial homework for launching the scheme.
Shedding lights on the details of the scheme, the minister said youth interested to acquire the credit facility under the scheme will be required to present their idea to launch a business to a committee to be set up by the department.
The committee will review the business idea and after analyzing the pros and cons of the scheme will approve or disapprove it. On approval of the idea by the committee, the youth will be provided with the required credit facility.
The applicant is required to bear 30 per cent of the total investment while the remaining 70 will be provided by the department in the form of a loan. For the females, the ratio of investment by the applicant has been set at 20 while the remaining 80 per cent will be provided by the department.
The loan will have to be returned within five years with one year of a grace period. The Industries Department will bear three per cent of the interest on the loan.
The Minister said that Rs550 million have already been apportioned for the scheme, which will be enhanced to Rs1 billion later on. The graduates of TVETA can avail the credit facility under the scheme, he added.
Those already doing business will also be eligible to apply for the credit line to expand their businesses, while university students are also eligible to apply for loans under the scheme.