DesPardes + PKonweb

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

Pakistan currently has largest percentage of young people in its history

PKONWEB — The PTI-led government on Tuesday approved a massive youth employment initiative dubbed “Kamyab Jawan Program” meant to foster entrepreneurship and spur employment by giving loans of up to Rs five million to youth.

With the Rs100bn soft loan availability portfolio, a young Pakistani (the country has a huge youth bulge– almost two-thirds of the population) can start his or her own business and help generate jobs which would boost the economy.

The Special Assistant to Prime Minister on Information and Broadcasting Dr Firdous Ashiq Awan announced the federal government had approved the plan.

Out of 200m population, nearly 100m are youth. Even if only 2 percent benefit from the program and half succeed, we would have additional 1m entrepreneurs and providing employment to 4m to 5m people (including himself or herself).


The governmental move comes as the banks and the individual loan seekers (SMEs), both operate with constraints. Some are self-inflicted, while others are credit finance requirements related.

The PM-Khan’s central cabinet held a thorough discussion on education policy also while announcing the new Rs 100 billion youth loan program. Both could be wrapped together and made to work, as vocational and futuristic skills related schooling (in private sector) is the need of the hour.

Youth aged 18 to 35 years were 65 percent of the population and in order to empower them, the cabinet had decided to launch the “Kamyab Jawan Program”, she said. Engaging maximum young people in economic and trade activities which could create job opportunities for the rest has all the available highways provided the State steps in (partnership) to make it and see it happening.

Women, who are more than 50 percent of the population would definitely benefit from the program if affirmative steps are taken– 25 percent of the loans would be given to them, Firdous said. However, global study shows women generally are more participative in the loan cycle integrity wise. Therefore, there should not be a “quota system” we feel. The idea smacks of |discrimination right off the bat. In fact, women should be more encouraged to be participative. They will add to becoming addition to the formal work force and at the same time increase the home business concept.

Dr Firdous said loans from Rs 100,000 to Rs 500,000 would be given to youth on six percent interest for those who add equity of Rs 50,000 or more. Loans more than Rs 500,000 to Rs five million would be lent on eight percent mark up with 20 percent equity by the eligible applicant, she added. The loan figure should be doubled and the total loan portfolio should be as much (if not more) as the Naya Housing’,” said some experts. This initiative has a shorter turnaround cycle and mobility comparatively.

Discussions with some professionals and related industry experts indicate the following: Out of 200m population, nearly 100m are youth. Even if only 2 percent benefit from the program and half succeed, we would have additional 1m entrepreneurs and providing employment to 4m to 5m people (including himself or herself). This is a very conservative estimate though. But impressive for a developing economy, and faster than Naya Housing which is a great initiative too.

Added plus would be: these entrepreneurs and workers would become ‘tax return filers’, ‘tax payers’, ‘members of credit community’, and part of the documented (formal) economy.

The potentials are huge, provided a one-window service is created nationwide for making it ‘kamyab’ (successful). These satellite offices can be run and managed by the youth and the students– not “government employees”.

Even if the program yields half success (as estimated) qualitatively and quantitatively, the exercise would still unleash socio-economic change in the country from grass-root level (urban and rural both), the experts said.

The youth would become self employed and not only bear their own burden, but would help reduce unemployment, she explained.

According to best practices worldwide, the self-employed, small and medium sized business enterprises (SMEs) generate the fastest growth curve and add maximum grass-root employment in the shortest time period. Therefore, such an initiative–constraints notwithstanding, could be one of the low hanging fruits we have earlier written.

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