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Convert 100B Loan Program For Youth, Our Future, Into One-Window Initiative

AYSHA AHMED — The enthusiastic, capable and hardworking class of Pakistan’s youth currently: 1. finds good jobs locally (corporate sector); 2. migrates abroad to countries like Canada and Australia; 3. seeks international scholarships for higher education (and then settle there); 4. joins family business at home.

While considering the proposal of Rs100bn Youth Loan Program, it is noteworthy that the intelligent youth shall compare cautiously before considering taking a loan, with the above four options for future prospects. 

Starting a business is not just a matter of initial investment, but a medium term (if not long term) market analysis is kept in view. Currently, the market even for already settled businesses is not so favorable.

If only the policy provides lucrative incentives and promotes businesses that can attract foreign consumers as well, then shall the entire program be beneficial.

Such enterprises may include:
1. industrial homes for silk farming, plus cloth, textile designing, garments/designer clothes, selling in local and foreign markets;
2. development  of animation skills, creating informational videos and publishing them (even on  YouTube can get income);
3. institutional training centers for kids to learn STEM skills, robotics etc;
4. establishing daycare centers (good for ladies). They ll earn as well as support other working women;
5. designing technical projects through software (the loan can fulfill software costs). Solutions to engineering problems locally and abroad. (same goes for finance).
And many more.

Related Article: 100Bn Youth Loan Program Could Create 1m Successful Entrepreneurs, 5m Jobs

The overall leverage and its national effect can be extracted from the campaign if the youth doesn’t have to move to and fro with piles of documentations for approval from one office to another.

Additionally, a proper benchmark and milestones have to be established followed with proper accounting system and audit procedures– something we are not familiar with. Their need has to be maintained on continuous basis to establish transparency of the system.

According to UNDP’s Human Development Report (based on 2017 data), 70 percent of our youth are illiterate, with a 50/50 male-female demography and 64 percent living in the cities. Above all, 94 percent fall within the category of no education to 12-years of education.

It is therefore important that prior to allocating an amount for loan to the youth, a framework be established to benchmark different criteria for access to loan which would also require affirmative steps including but not limited to mentoring, coaching and operational partnership, etc. Sustainability of the program would be judged not on number of youth loans granted but the success ratio achieved in generating employment, entrepreneurship goals and broadening the tax base, etc.

Reason: A 30% illiteracy rate with only 6% having graduation/degree highlights the fact that the number of youth that shall fulfill the requirements and shall have the capability to build up an enterprise could be low.

Therefore, a nationwide neighborhood-based one-window operation could be the jump-starter and backed with ‘Affirmative Action Plan’ (AAP) like campaign for ‘the disdavantaged’ could help.

The division of funds ought to follow the principles of inclusiveness also with an eye at demographic studies, wherein, the focus and priority should be well graduated between two regions with lowest level of Youth Development Index (YDI) and regions with highest level of YDI.

In other words, multiple regression analyses should be undertaken based on appropriate weightage assigned to all dependent variables so that a sustainable public policy and tradeoff combination could yield minimum loss ratio and maximum productivity even if the process is painful and slow.

Finally, we may also then develop the system as if it’s a pilot project, and for other sectors and subsectors to follow sans politics if possible.

For all these to happen within 4 years, a bipartisan consensus on give-and-take basis should be explored. After all previous two governments tried their version of youth programs– youth is our future.

The author is a professional engineer with Master’s degree in Engineering Management, and energy analyst holding JD.

Additional input by Irshad Salim, a business consultant and analyst.