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 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 borrower. 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, 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 upto 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 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 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. |
|