PM Youth Business Loan Scheme

Prime Minister Nawaz Sharif has launched PM Youth Business Loan Scheme in Dec 2013.

While inaugurating business loan scheme for youth, Prime Minister Nawaz Sharif said the government had opened new avenues for the youth to stand on firm footing. He said: “During the election campaign, I witnessed the vigour and enthusiasm that the youth showed and I thought the government should empower the youth so that they could contribute effectively towards development of the country.” He added, “I decided to form government only for the youth and to solve their problems as they are the future of Pakistan.”

While addressing the youth, the prime minister said there would be complete transparency in the award of loans and an effective monitoring mechanism had been evolved to keep a check on the loan-awarding process so that merit could be ensured

He further said Rs 100 billion had been allocated for this programme during the current financial year. In the first phase, 100,000 unemployed youth would be given loans through ballot. “No one will have the authority to influence the loan-awarding process,” said the prime minister. Youth will have 8 years payback time with first year grace period for repayment.

The prime minister said the government reposes full trust in the youth of Pakistan and expects that the loans would be utilised effectively to generate business and employment opportunities. About 50 percent of the loans are allocated for female youth. The government is also going to announce low-cost housing scheme for the poor very soon, he disclosed.

Earlier, PM Youth Programme Honorary Chairperson Maryam Nawaz said the most important advantage of the PM Youth Programme is the youth would be converted from dependents to providers. She said: “The PM has assigned me responsibility of empowering our youth and I gladly accepted because investing in youth is equal to investing in Pakistan’s development. The PM Youth Programme comprises six schemes, including business loans programme, micro interest-free loans programme, skill development programme, fee reimbursement for deserving students programme and training programme.”

Maryam Nawaz further said 55 projects’ pre-feasibilities have been prepared and are available on SMEDA website. However, if an applicant has his/her own business plan, that too would be acceptable for participation in the award process. The National Bank of Pakistan and the First Women’s Bank have been strictly directed to ensure complete transparency and merit, she concluded.

Chief Coordination of PM Youth Business Loans Scheme Marvi Memon  said that the balloting will be done in a transparent way and 15,000 applicants will be given loans in the first ballot and the applicants who could not succeed in the first ballot will be considered for the coming ballot

Federal government assigned advisory role to Small and Medium Enterprises Development Agency (SMEDA) in implementation of recently launched PM Youth Business Loan Scheme. Specific task assigned to SMEDA was to prepare reference pre-feasibility studies for borrowers and financial institutions. Living up to the trust and confidence posed by government on SMEDA, agency has developed pre-feasibility studies in eight (8) sectors. These prefeasibility studies are structured like a business plan and provides very useful insights into of the proposed business. Apart from providing feasibility studies SMEDA will also provide a template for business plan preparation both in English and Urdu and requisite guidelines for the loan applicants.

For More details and downloading other related documents for PM Youth Business Loan Scheme, please visit SMEDA website:

For your convenience, most of the basic important details about PM Youth Loan business Scheme are provided from SMEDA.

PM Youth Business Loan Scheme - Details

Prime Minister’s ‘Youth Business Loan’, for young entrepreneurs between the age group of 21 - 45 years, is designed to provide subsidised financing at 8.0% mark-up per annum for one hundred thousand (100,000) beneficiaries, through designated financial institutions, initially through National Bank of Pakistan (NBP) and First Women Bank Ltd. (FWBL).

Small business loan with tenure up to 8 years, with first year grace period, and a debt : equity of 90 : 10 will be disbursed to SME beneficiaries across Pakistan, covering; Punjab, Sindh, Khyber Pakhtunkhwa, Balochistan, Gilgit Baltistan, Azad Jammu & Kashmir and Federally Administered Tribal Areas (FATA). It has a 50% quota for women and 5% quota for families of Shaheeds, Widows and Disabled persons.

SMEDA has been tasked with an advisory role in the implementation of PM Youth Business Loan scheme by providing more than fifty updated pre-feasibilities for referencing by Loan beneficiaries and participating banks to optimally utilize their financial resources. SMEDA shall continue to add additional prefeasibilities. However, it is not necessary to develop a project on these prefeasibilities. Any other projects will also be entertained by the banks.

Guidelines for Prospective Loan Applicants of PM Youth Business Loan Scheme

SMEDA has taken the initiative of developing pre-feasibility studies in eight (8) sectors, and as per directions of the Prime Minister, has made them available for the loan beneficiaries, through the SMEDA website, for the promotion of an entrepreneurial culture in Pakistan. To date, our website has recorded more than 5,500,000 downloads of the published pre-feasibility reports.

These prefeasibility studies provide a general understanding of the proposed business, and are structured like a business plan. However, to assist the prospective entrepreneurs / loan applicants, SMEDA has provided Business Plan Guidelines for the loan applicants. 

Frequently Asked Questions - FAQs

What are the salient features of PM Youth Business Loan Scheme?

a)    Loan up to Rs. 2 Million (Rs. 0.1 Million – Rs. 2.0 Million)

b)    Only 8% markup per annum

c)    Repayment of loans in eight years, with grace period of one year included in the total tenure

d)    One personal guarantee required - No other security

e)    90% Bank Loan and 10% Equity to be contributed by the Applicant. Your contribution could be in the form of cash or immoveable property and will be required after the approval of loan

f)     50% quota for women, 5% quota for Dependents of Shaheeds, Widows and Disabled

g)    Total No. of loans to be given are 100,000 for Year 2013-14

h)    There is no cost of application form. However, Rs 100 has to be paid as processing charges to participating Banks at the time of form submission

Who can apply under this PM Youth Business Loan Scheme?

Pakistani and AJK nationals, between 21 to 45 years of age can apply for the loan

Where can I get loan application form for PM Youth Business Loan Scheme?

Softcopies can be obtained from SMEDA, NBP and FWBL websites. Hardcopies are available from all branches of NBP and FWBL and 25 SMEDA Helpdesk across Pakistan.

What if the amount of financing required by the business is more than the loan limit specified in this Scheme?

Maximum Loan under this scheme is Rs. 2 million. Businesses proposals / applications requiring loan financing of more than 2 million will not be entertained.

I want to do a business which requires Rs. 5 Million. I can arrange Rs 3 million from private source. Since I am short of Rs. 2 million, can I also apply for Rs. 2 million loan under the scheme?

Yes, you can apply for loan and banks will entertain your request.

If I select a feasibility developed by SMEDA, but require less funding than what is advised in that feasibility?

You can still use standard SMEDA feasibility without any alteration, and Banks will consider your request for the size of loan required irrespective of the loan amount calculated in the standard feasibility.

What documents should I submit with my loan application form? -PM Youth Business Loan Scheme.

a)    1 Recent Passport size photograph of the applicant

b)    Photocopy of Applicants CNIC

c)    Photocopy of Guarantor’s CNIC

d)    Basic Borrowers Fact Sheet (Part A of form)

e)    Guarantor’s Information (Part B of form)

 f)    Copy of SMEDA Pre-feasibility Study or Applicant’s own prepared Business Plan / Feasibility / Project Proposal.

What is the monthly installment of loan? - PM Youth Business Loan Scheme

Monthly installments will depend on the size of the loan. For your convenience, a financial calculator (excel based) has been developed and available at SMEDA website. The installment amount does not include bank charges and just an estimate /approximation to give you an idea. 

Where can I submit loan application for PM Youth Business Loan Scheme?

Loan applications can be submitted in all branches of following banks

1.   National Bank of Pakistan (NBP)

2.   First Women Bank (FWBL) 

Is there any educational qualification requirement for obtaining Loan

There is no minimum qualification requirement for obtaining Loan.

Is there any last date for loan application?

No, an application can be made at any time after the launch of the scheme.

What is the criteria for guarantor for PM Youth Business Loan Scheme?

Following individuals can provide guarantee for the loan applicants:

·         Government Servant of BPS 15 or above, OR

·         Any other individual having net worth of 1.5 times of the loan amount applied for.

What is Net worth?

Net worth is total assets (Moveable or immoveable) in the name of the individual minus any liabilities such as loans from banks or other individuals.

Can guarantor be Blood Relative of the applicant?

No, Blood Relatives’ guarantee is usually not acceptable to the Banks.

When does the first Loan installment become due? - PM Youth Business Loan Scheme

First Loan installment will be due after one year of loan disbursement

What steps are involved in application processing? PM Youth Business Loan Scheme

Following is the process flow of loan application;

·         Issuance of application form

·         Submission of filled application form

·         Front end screening

·         Form acceptance

·         Desktop verification

·         Telephonic verification

·         Physical verification

·         At Branch assessment

·         Credit approval 

What if my name is not included in the list of successful loan applicants?

The bank will inform you about approval status of your application through letter / telephone call / SMS / email. The SMS will come from PMYouthProg, 80028 or will be made available on PMO website ( Confirmation from any other number / source should not be relied upon.

Who will inform me about the approval status of my application?

The bank will inform you about through letter / telephone call / SMS / email. The SMS will come from PMYouthProg or 80028 PMO website Confirmation from any other number / source should not be relied upon.

What if my loan application is rejected by the bank? How can ‘rejects’ fulfill their ‘shortcomings’?

Please try and fulfill all the bank’s requirements in the first instance. However, if your application is rejected due to some procedural / documentation requirement, correct the mistakes, address the shortcomings and you can certainly apply again.

What if I have a problem in my business?

Sometimes businesses have problems. All loan beneficiaries are advised to give their best to make their business successful. It is also advisable to keep your banker informed of any problems, which may affect your ability to repay loan and seek technical guidance. SMEDA and the banks have been directed to put in place system of periodic guidance to the entrepreneurs in running their businesses successfully.

What will be penalty on delays in repayments or if I am unable to payback the loan?

Details regarding delay charges and default cases can be obtained from the participating banks.

Is there any limit on number of loans for particular sector or geographical area?

The scheme is for the benefit of people from across Pakistan and at the same time it is intended to develop maximum number of potential sectors of national economy. Therefore, it has been ensured that potential sectors and all geographical areas including rural areas are covered through the program. 

How much time is required for processing the loan? PM Youth Business Loan Scheme

15 days are required by participating banks to process the loan.

Can I get loan for existing Business?

Yes, all businesses, including existing businesses, can apply for loan.

Is there any option for early retirement of loan?

Yes, the borrower can opt for early retirement of loan without any penalty from the bank.

Are balloon payments allowed?

The borrower can make as many balloon payments as he/she wants.

Can I get this loan if I am a Bank defaulter?

No. If you are a bank defaulter, you are ineligible.

If I am a Woman, can I apply for loan from NBP?

Yes, women can also apply for loan from NBP.

How can SMEDA help me to get Loans / what is SMEDA’s role in the scheme?

SMEDA has been tasked with an advisory role in the implementation of PM’s Youth Business Loan by providing

i. 56 Pre-feasibilities,

ii. Business Plan Template & Guidelines,

iii. Information on relevant government institutions and technical experts

iv. Providing Info pack at SMEDA Helpdesks, which contains all the necessary information like:

·         List of Pre-feasibilities

·         Business plan template and guidelines

This information is also available, free of cost, on SMEDA’s website:SMEDA

Is there any cost for SMEDA services?

SMEDA services are free of cost.

I want to know more about SMEDA’s Prefeasibilities

Pre-feasibilities and FAQs for 56 pre-feasibility studies can be read and downloaded from SMEDA Website: SMEDA

What should I do if I want to start a business, which is not covered under SMEDA’s Pre-feasibility? Who will help me to make a business plan in this case?

The applicant can start any business of his / her own choice. It is not necessary that a loan applicant has to make a project only on the pre-feasibilities prepared by SMEDA. You can select to do any useful business. You can develop a Business Plan / Feasibility / Project Proposal on your own and submit it directly to the participating banks for evaluation. Additionally, applicants can benefit from the following information, which is available, free of cost, on SMEDA’s website.

·         Business plan template and related FAQs

·         Group training sessions at SMEDA’s 25 Helpdesks

This information is available at SMEDA website ( and 25 SMEDA Helpdesks.

How can I contact SMEDA for guidance regarding a specific Pre-feasibility?

Helpdesk officers across 25 locations are primary contacts for providing details. Additionally, please visit SMEDA website:, which will provide you all necessary details.

What is the role of consultants and experts?

Consultants will provide customized guidance for business plan development. Experts may be contacted for guidance on sector specific queries. However, private sector experts / consultants usually charge for their services.

What is the cost of getting customized business plans developed by consultants?

This usually varies from consultant to consultant. It is between the consultant and the seeker of consultancy to decide upon the price.

Can loan applicants develop business plan by themselves?

Certainly. SMEDA has provided a standard Business Plan Template, Guidelines to Develop Business Plan, and Financial Calculators to assist applicants who wish to develop their own Business Plans.

Who will provide guidance to successful loan applicants? - PM youth Business Loan Scheme

SMEDA and Virtual University are developing training video documentaries in the following fields

i.      Entrepreneurship & Business Plan Development

ii.      Product Design & Development

iii.      Marketing and Distribution Plan

iv.      Accounting & Bookkeeping Services

v.      Business Process Outsourcing, Formal documentation, etc.

vi.      ICT Services, Website for e-enabling SMEs

These training documentaries will be shown on PTV and Virtual University, and the schedule will be made known to the public so that they can improve their knowledge about different ways of doing better business by watching these programs.

Who will give me information if my application has been accepted for balloting?

Participating Banks will contact successful applicants. List of successful applicants will also be uploaded on the website of the Prime Minister’s Office ( for your convenience.

How will the government ensure transparency of the PM Youth Business Loan Scheme?

The Prime Minister has created a number of monitoring mechanisms to ensure that the programme is run with complete integrity and transparency. A special monitoring cell has been established in the Prime Minister’s office to oversee these issues.

If I have a complaint, who should I approach for redressal?

Applicants can contact the Prime Minister’s Office on toll free number (0800-77000). Prime Minister and Chairperson Prime Minister’s Youth Development Program will personally monitor complaints.

How will favoritism or corruption in this PM Youth Business Loan Scheme be stopped?

There are very strict instructions for selection on merit and very strict monitoring arrangements have been put in place.  The activities will be monitored by the Prime Minister’s Office, and by the Office of Chairperson Youth Program. 

Guidelines on Developing an effective Business Plan

1.      What is a Business Plan

a.      It is the face of your business; Functions like a magnet, attracting your clients, investors and strategic partners.

b.      It is a living document; You should review it with every change in external and / or internal factors.

2.      Why does the applicant need a Business Plan

a.      Read the first page of Business Plan Template; explaining the importance of a business plan for any business.

b.      First step for fine tuning your ideas for practical implementation into a functioning business.

c.       Acts as a ‘How to’ guide for running your business.

d.      Helps you map options for best and worst case scenarios.

3.      How to develop a Business Plan

a.      Know your business: Market research, product / service, target customer.

b.      Create your identity: Company/ Business mission, vision.

c.       Structure your thoughts: Write your Business Plan. (Refer to Table of content of Template)

       4.      Key features of a good Business Plan

            Think about the following before and after you’ve written every section:

a.      Description of your project and product. (Refer to Sec II of BPT)

b.      Marketing Plan: Product, customer profile, distribution channel and proposed location, pricing, promotion and advertising. (Refer to Sec III of BPT)

c.       Operational Plan: Production, location, Inventory, Credit, Payables. (Refer to Sec IV of BPT)

d.      Management and Organization: Competitive strengths, Legal form and structure. (Refer to Sec V)

e.      Startup Expenses and Capitalization: Estimating costs of Pre-Operations, Contingencies and unforeseen. (Refer to Sec VI)

f.        Financial Plan: Recommend using professional help for Income Statement, Balance Sheet and Cash flow. Help may be sought from Financial Calculator available on SMEDA website. (Ref to Sec VII)

g.      Appendices: Advice on appending useful written materials to Business Plan. (Refer to Sec VIII)

h.      Refining the Plan: Advice on how to create a plan specifically suited to applicants business. (Refer to Sec IX)

5.      Who will develop a Business Plan

a.      The entrepreneur may use professional help, however it is advisable to DO IT YOURSELF

b.      Technical advice from private sector experts/Govt. institutions, listed on SMEDA website

6.      How SMEDA can help

a.      Provide guidelines and explain how to develop a Business Plan. Refer to a related Pre-feasibility

b.      Refer to government institutions, private sector experts / institutions, secondary resource materials, SMEDA website.


For More Details & direct downloads of forms for PM Youth Business Loan Scheme, Please visit SMEDA website.

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