Background & Purpose of PM Youth Business Loan Scheme

Out in those streets there are many future entrepreneurs looking to kickstart their businesses, you may be one of those and if you are then you are in the right place. Because right now I am going to showcase you the PM Youth Business Loan Scheme. Let me guide you through the whole process! This initiative was launched by the government of Pakistan for empowering the youth. Its focus is on the youngsters, its aim is to turn them into entrepreneurs. Now, let me help you to kickstart your journey!

Also Read: Kisan Dost Scheme 2025

Objectives of PM Youth Business Loan Scheme

Following are the objectives of the Prime Minister’s Youth Business & Agriculture Loan Scheme,

💼 It promotes self-employment in youngsters, such as you.

📈 Economic participation of young entrepreneurs in various business sectors for driving growth.

🌾 Accessible production and development loans in agriculture

⚖️ General financing with gender-based quotas to ensure fairness.

Eligibility Criteria of PM Youth Business Loan Scheme

You must meet the following requirements to be an applicant,

🛂 You must be a Pakistani citizen.

Age Requirement

🎯 In general businesses, your age can be between 21-45 years

👤 Applicants include individuals, sole proprietors, partnerships, and companies.

💻 18 years is minimum for IT/E-commerce students(with matriculation).

Business Type

👥 At least one member should meet the age criteria in case of partnerships or companies.

Sectors Covered

🏢 All valid SME (startups and existing) sectors are covered

🌱 Agricultural sectors included as said in SBP guidelines.

Loan Tiers of PM Youth Business Loan Scheme

Below are the categories for loans, Each tier has its own limits and pricing:

Tier	Loan Amount (PKR)	Mark-Up Rate	Maximum Tenure
T1 💰	Up to 500,000	0% (interest-free) 🏷️	Up to 3 years, or 1 year for crop loans 🌾
T2 💵	500,001–1,500,000	5% 📉	Up to 8 years for long-term loans, or 5 years for working capital ⏳
T3 💸	1,500,001–7,500,000	7% 📊	Same repayment period as Tier 2 ⏱️

All T1 loans are margin-free and are serving interest-free aid to aspiring entrepreneurs. The financed rate are comparatively low for T2 and T3
( 5% to 7% ).

Also Read: PM Youth Business Loan Scheme

Loan Types

This scheme offers multiple loan types,

💼 Term loans.

💵 Working capital loans

🏭 Leasing or murabaha financing (machinery, locally manufactured vehicles)

🏗️ Up to 65% of loan limit for civil works financing

🌾 Agricultural loans (production and development).

Security Requirements

Security requirements depend upon loan tiers,

📝 Personal guarantee only in T1 and T2, in other words no additional security required.

🚗 In T3 security depends upon your bank’s policy, a financed car can serve as security.

Equity

📊 T2: 10% borrower equity.

📈 T3: 20% borrower equity.

✅ Existing businesses: No equity requirement.

Repayment Terms

⏳ T1 General Loans: Up to 3 years.

🌾 T1 Crop Loans: 1 year with total amount repayment.

🏦 T2 & T3 Long term loans: Up to 8 years with 1-year grace period

💰 T2 & T3 Capital Loans: Up to 5 years

📅 T2 & T3 Repayment Frequency: Monthly or as per agreed schedule

Generally these payments can be done via monthly installments, although more flexibility can be provided finance is calculated on the outstanding balance at month-end.

Application Process of PM Youth Business Loan Scheme

The process is very simple,

🌐 Visit the official site of PMYP https://pmyp.gov.pk.

🏦 Select he loan category and participating bank which suits you.

📝 Complete the application form

📄 Submit all documents CNIC, photos, business plan, financial statements (if applicable).

⏳ Wait for an update from your bank CNIC, photos, business plan, financial statements (if applicable).

✅ If approved you’ll be further guided by the bank.

Special Provisions of PM Youth Business Loan Scheme

Some of the Special Provisions of this scheme are,

👩 25% quota is reserved for women.

💳 A holder can carry both short and long term loans (Rs 7.5 million limit.)

💵 PKR 100 for processing, plus bank charges if any

Impact Data of PM Youth Business Loan Scheme

Following impacts were observed in the previous years,

📊 Since 2013, 54,000 loans worth PKR 73.55 billion have been given.

💰 Allocation in 2023–24: Rs 10 billion.

📈 Allocation in 2024 (till March): Rs 26.8 billion.

Advantages of PM Youth Business Loan Scheme

There are many advantages of this initiative. Some of them are below,

💸 No interest will be taken for T1 loans.

📉 Low mark-up for T2 and T3 can be managed easily.

⏳ Long duration of repayment tenures.

📊 Low equity requirements will be a game changer.

🌐 With the digital application system things will be much easier.

Limitations of PM Youth Business Loan Schme

There are some limitations of this system along advantages,

🔒 T3 security requires a financed car depending upon the bank’s policy.

⚠️ Awareness issues in some areas will limit the number of applicants.

🏛️ his scheme Depends on government financing, number of available loans can be limited

❌ There will be default risks if the business owner fails in generating revenue.

Conclusion

It is a structured system used to provide support to the youth and the farmers with interest free loans. It offers low equity. If this system is manged with effective governance we can easily uplift by empowering the youth. It aims on providing well financed rates, general policies and long repayment periods , this makes it a significant tool for youth economic empowerment in Pakistan.