Key features of the Kamyab Jawan Youth Entrepreneurship Scheme (PMKJ-YES) Prime Minister have been disclosed to the State Bank of Pakistan ( SBP).
SBP states that PMKJ-YES support is available for the creation of new enterprises and/or extensions for young people between 21 and 45 years of age.
Youth owned SMEs are also eligible according to the age group mentioned above. In addition , the minimum age limit for businesses linked to IT / e-commerce is 18 years and a minimum education required is matriculation or equivalent.
Under the program, financing is segregated into three tiers. Under tier-1, loan limit is from Rs 100,000 up to Rs 1 million.
Under second plan tier-2, loan limit will be from above Rs 1 million and up to Rs 10 million.
Under the third plan tier-3, loan limit is from above Rs 10 million and up to Rs 25 million.
With regards to interest, for tier-1 loans, markup rate will be 3 percent, for tier-2 loans it will be 4 percent and markup rate of 5% will be charged on tier-3 loans.
Maximum loan tenor will be up to 8 years including grace period of up to one year.
For new businesses, Debt-Equity ratio for tier-1 loans is 90:10, for tier-2 and tier-3 loans is 80:20. For existing businesses, Debt-Equity ratio is Nil for all tiers. 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.
Tier-1 loans will be clean; however, only personal guarantee of the borrower is required. For tier-2 and tier-3 loans, security requirements are as per executing banks’ own credit policy.
Under the scheme, loan can be availed from commercial banks working as Executing Agencies (EAs).